New Tax Era Begins! Nirmala Sitharaman Tables Income Tax Bill 2025 in Parliament, What It Means for Taxpayers, Check

New Income Tax Bill 2025: Union Finance Minister Nirmala Sitharaman has introduced the much-anticipated New Income Tax Bill 2025 in the Lok Sabha, marking a major step toward tax reforms. The bill aims to replace the outdated Income Tax Act of 1961 with a modern, simplified, and more transparent taxation system. To ensure thorough scrutiny, it will be referred to the Select Committee of the Lok Sabha, which is expected to submit its final report by March 10, 2025. If passed, the new Income Tax Act is likely to come into effect from April 1, 2026.

Major Overhaul in Tax Laws with the New Income Tax Bill 2025

According to reports, the New Income Tax Bill 2025 aims to simplify taxation by replacing complex definitions with formulas for key concepts such as capital gains, cost of acquisition, and inventory valuation. This move is expected to minimise errors and reduce confusion in tax calculations.

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FM Nirmala Sitharaman introduces The Income-Tax Bill, 2025 in Lok Sabha@nsitharaman @FinMinIndia @ombirlakota @LokSabhaSectt pic.twitter.com/Ic6CMKZptX

— SansadTV (@sansad_tv) February 13, 2025

One of the biggest changes is the reduction in the number of sections, making tax compliance much easier for individuals and businesses. Reports suggest that the bill will also introduce new regulations for cryptocurrency transactions, requiring entities dealing in digital assets to disclose their transactions under fresh guidelines.

Why the New Income Tax Bill 2025 Matters for Taxpayers

Speaking to ANI, BJP MP Tejasvi Surya highlighted that the New Income Tax Bill 2025 will modernise India's direct taxation system. He stated that the bill will make tax laws "more logical, straightforward, and easier to comply with." With a focus on clarity and efficiency, the government aims to provide relief to taxpayers by eliminating outdated provisions and making tax filing hassle-free.

What’s Next for the New Income Tax Bill 2025?

With its introduction in the Lok Sabha, the New Income Tax Bill 2025 will undergo detailed discussions before being passed into law. A Joint Parliamentary Committee (JPC) will be formed to examine the bill and is expected to submit its report in March 2025. If approved, the Income Tax Act, 2025, is likely to take effect from April 1, 2026, ushering in a new era of tax reforms.