The Income Tax Bill, 2025 introduced in the Lok Sabha

The Income Tax Bill, 2025 was introduced in the Lok Sabha by Union Finance Minister Nirmala Sitharaman, who sought the passage to the Speaker to constitute a Select Committee to assess the legislation. The bill seeks to simplify tax laws, regarding reduction of sections, removal of redundancy, and consolidation of key provisions. While opposing members raised doubts about the requirement of a new law, the government stood its ground on its necessity.

Key Features:

• Select Committee for Review
  • Speaker Om Birla to constitute a committee to examine the bill.
  • The committee’s report is expected to be submitted by the first day of the next session.
• Simplification of Tax Laws
  • 1,200 provisos and 900 explanations removed that could lead to simplification.
  • Sections and chapters consolidated for overall easier comprehension of the tax code.
  • Salary related provisions were placed together so that taxpayers can file return of income without hassle.
• Introduction of ‘Tax Year’
  • Better clarity for taxpayers and therefore, with this, ‘previous year’ and ‘assessment year’ will be done away with
  • At the same time, it will have India’s tax terminology in sync with global tax practices.
• Digital & Administrative Reforms
  • New rules and forms will be notified after Parliament approval.
  • Simultaneous development of software for administrative and compliance purposes.

Section Wise Mapping of Old and New Laws

• The Income Tax Department will place detailed and microscopic comparisons of provisions in the public domain.
• This is aimed at facilitating a smooth transition for taxpayers to come to terms with the new rubric

Reference to Past Direct Tax Codes

• In drafting the new bill, the Direct Tax Codes from 2009 and 2019 were consulted.
• Some recommendations from the earlier tax reform attempt have been taken on board.