The Union Government has approved the New Income Tax Bill, 2025, replacing the six-decade-old Income Tax Act of 1961. The revised legislation is aimed at simplifying tax structures, ensuring greater compliance, and aligning the tax regime with the evolving economic landscape.
Simplified Tax Slabs
One of the major highlights of the new bill is the revision of tax slabs, which aims to make the system more equitable. The changes are designed to offer relief to middle-income earners while broadening the tax base.
Focus on Digital Economy
The bill introduces provisions to address taxation in the rapidly growing digital economy, ensuring that income generated through online platforms and cross-border digital transactions is taxed fairly.
Boost to Ease of Doing Business
Corporate tax procedures have been streamlined to reduce litigation and improve transparency. The law also proposes quicker dispute resolution mechanisms to build trust between taxpayers and authorities.
Encouraging Voluntary Compliance
The government has included incentives for timely and accurate tax filing, along with stricter penalties for evasion. This balance of reward and accountability is expected to strengthen revenue collection.
Impact on Individuals and Businesses
For individuals, the bill promises a more straightforward filing process, while businesses may benefit from reduced compliance burdens. However, tax experts suggest that some sectors may require adjustments to adapt to the new provisions.
