New Income Tax Bill 2025: Major Tax Law Reforms Expected to Ease Burden on Taxpayer, Say Experts

New Income Tax Bill 2025: The Indian government is preparing to introduce a New Income Tax Bill, aiming to make tax laws more transparent and easier to understand. Experts believe the bill will use clear and simple language, ensuring that taxpayers can easily grasp their rights and responsibilities. The move aligns with the government’s commitment to ‘trust first, scrutinise later’, reducing unnecessary scrutiny and making compliance smoother.

Union Finance Minister Nirmala Sitharaman is expected to present the New Income Tax Bill 2025 in Parliament this week, where it will be examined by the Standing Committee on Finance. Industry experts suggest that the bill will modernise tax laws, eliminate redundant provisions, and reduce compliance burdens for individuals and businesses.

Key Changes Expected in the New Income Tax Bill

Simplifying Tax Residency Rules

One of the major changes anticipated in the New IT Bill 2025 is a simplified approach to determining tax residency.

"It is expected that the new IT Bill 2025 would address the issue of complexity in determining tax residency of an individual in India. Currently, it involves multiple conditions for qualifying an individual as a tax resident," said Harsh Bhuta, Partner, Bhuta Shah & Co.

Reducing Tax Law Complexity

The current income tax law is vast and complicated, containing many outdated provisions. Experts believe the new bill will remove redundant clauses and simplify compliance.

"The new IT Bill is anticipated to address this issue by eliminating certain redundant as well as obsolete provisions and reducing its volume considerably," added Bhuta.

No New Taxes, Just Better Compliance

Experts confirm that the New IT Bill 2025 will not introduce new taxes but will focus on simplifying tax compliance. One key change is that income-tax reliefs or amendments will no longer be restricted to budget announcements. Instead, the government could implement these changes through executive orders.

Less Scrutiny, More Ease of Doing Business

The New Income Tax Bill is expected to reduce the number of scrutiny cases, ensuring that honest taxpayers are not unnecessarily harassed.

"The focus of the new IT Bill will be on a reduced number of scrutiny cases, ensuring that honest taxpayers do not face undue harassment. This will also help in reducing litigation," stated Bhuta.

A Step Towards Modern Taxation

The review of India’s Income-tax Act, 1961, is aimed at modernising and simplifying the tax system. Experts suggest that these reforms will increase India’s tax-to-GDP ratio and support economic growth.

"The new IT Bill aims to enhance ease of doing business, reduce ambiguity in interpretations, and improve tax administration and compliance. This will help India reach global tax-GDP ratio levels and support sustainable economic growth," said Sandeep Chaufla, Partner, Price Waterhouse & Co (PwC).

With the New Income Tax Bill 2025, the government is taking a step towards simplified tax laws, reduced scrutiny and improved compliance, ultimately benefiting both taxpayers and the economy.