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Government to Introduce New Income Tax Bill in Budget 2025 Session

Budget 2025: The upcoming Budget 2025 session of Parliament is set to witness the introduction of a new Income Tax Bill aimed at simplifying the decades-old Income Tax Act of 1961.

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Neha Kumari
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Budget 2025

Budget 2025 Photograph: (Instagram)

The upcoming Budget 2025 session of Parliament is set to witness the introduction of a new Income Tax Bill aimed at simplifying the decades-old Income Tax Act of 1961. This initiative seeks to make the law more comprehensible, concise, and taxpayer-friendly, reducing its volume by approximately 60%, according to reports from the PTI.

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New Bill to Replace the Existing I-T Act

Unlike an amendment to the existing Act, the proposed bill will completely replace the current law. A government source revealed that the draft law, presently under review by the law ministry, is expected to be tabled during the second half of the Budget session, which will run from March 10 to April 4.

The Budget session itself will commence on January 31 with President Droupadi Murmu's address to the joint sitting of Parliament, followed by the tabling of the Economic Survey 2024-25. Union Finance Minister Nirmala Sitharaman will present the Union Budget 2025-26 on February 1.

Comprehensive Review and Modernisation

The initiative to revamp the Income Tax Act was announced by Sitharaman in her July 2024 Budget, targeting a complete review within six months. In response, the Central Board of Direct Taxes (CBDT) formed an internal committee to oversee the process, ensuring the law becomes clearer, easier to comply with, and less prone to litigation.

To ensure a thorough review, 22 specialised sub-committees were established to examine various aspects of the Act. Public inputs were sought under four main categories:

Simplification of Language

Litigation Reduction

Compliance Reduction

Elimination of Redundant Provisions

Aiming for Clarity and Certainty

The new bill aims to minimise tax-related disputes and litigation while enhancing certainty for taxpayers. By eliminating outdated provisions and streamlining language, the government hopes to create a modern and effective tax system.

This landmark move is expected to significantly reform India's taxation framework, benefitting both individual taxpayers and businesses alike.

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