Budget 2025: New Income Tax Bill likely to be tabled in Parliament on Thursday

A crispier and simplified Income Tax Bill 2025 having 536 sections and 23 chapters running into 622 pages is likely to be introduced in the Lok Sabha on ThursdayThe Bill once enacted will replace sixdecade old Income Tax Act 1961 which over the years became bulkier and complex with amendmentsThe proposed law replaces the term previous year as mentioned in the Income Tax Act 1961 with tax year Also the concept of assessment year has been done away withCurrently for income earned in the previous year say 202324 tax is paid in assessment year say 202425 This previous year and assessment year concept has been removed and only tax year under the simplified bill has been brought inThe Income Tax Bill 2025 comprises 536 sections higher than 298 sections of the current IncomeTax Act 1961 The existing law has 14 schedules which will increase to 16 in the new legislationHowever the number of chapters have been retained at 23 The number of pages has been reduced substantially to 622 almost half of the current voluminous Act which includes amendments made over the last six decadesWhen the Income Tax Act 1961 was brought in it had 880 pagesThis increase in sections reflects a more structured approach to tax administration incorporating modern compliance mechanisms digital governance and streamlined provisions for businesses and individuals The new law introduces 16 schedules and 23 chapters AMRG amp Associates Senior Partner Rajat Mohan saidAs per the proposed law clearer tax treatment on stock options ESOPs have been included for reduced tax disputes and includes judicial pronouncements of the last 60 years for more clarityA key departure from the IncomeTax Act 1961 is that previously the Income Tax Department had to approach Parliament for various procedural matters tax schemes and compliance frameworks Now CBDT has been empowered to introduce such schemes independently significantly reducing bureaucratic delays and making tax governance more dynamic he saidAs per new law the CBDT can now frame tax administration rules introduce compliance measures and enforce digital tax monitoring systems without requiring frequent legislative amendments as per the Clause 533After introduction the bill is likely to be sent to a parliamentary standing committee for scrutinyFinance Minister Nirmala Sitharaman had announced in Budget 202526 that the new tax bill will be introduced during the ongoing session of ParliamentSitharaman had first announced a comprehensive review of the Incometax Act 1961 in July 2024 BudgetThe CBDT had set up an internal committee to oversee the review and make the Act concise clear and easy to understand which will reduce disputes litigations and provide greater tax certainty to taxpayers Also 22 specialised subcommittees have been established to review the various aspects of the Income Tax ActPublic inputs and suggestions were invited in four categories simplification of language litigation reduction compliance reduction and redundantobsolete provisionsThe income tax department has received 6500 suggestions from stakeholders on review of the Income Tax ActThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever