Introducing Income Tax Bill 2025: Simplifying Tax Laws for All

On February 13, Finance Minister Nirmala Sitharaman introduced the new Income Tax Bill 2025 in the Lok Sabha. This new bill aims to make tax laws in India simpler and easier to understand. The old Income Tax Act, created in 1961 and changed many times, was too complicated and long. It included 47 chapters and 819 sections, and over 65 amendments made it difficult to follow.

The tax department explained that the old law became “bulky” because it was based on traditional writing styles and had many updates. They pointed out that the new law is necessary to keep up with changes in society and the law.

Many politicians in the opposition questioned why a new bill was needed. The government answered that the new law will help in multiple ways:

– Simplifying Language: The aim is to make the tax law easy to read and understand.
– Reducing Confusion: They want to clear up any confusing parts to lessen arguments and court cases.
– Easier Procedures: The new law will make tax processes simpler for everyone involved, giving more certainty to taxpayers.

The government wants to remove unnecessary rules, improve the structure of the law, and make it more readable. In July 2024, Finance Minister Nirmala Sitharaman announced that a major review of the Income Tax Act was planned, aiming to complete it in six months.

The drafting of this new bill started in August 2024. A core committee and 26 sub-committees worked together, gathering information and ideas from both domestic experts and international examples, like those from the UK and Australia.

During consultations, they collected around 21,000 responses from various sectors and received over 1,800 ideas for making the tax process simpler.

Key Differences:
– The old Income Tax Act had 5.12 lakh words, while the new Bill has 2.6 lakh words.
– The new Bill has 23 chapters and 536 sections compared to the old one’s 47 chapters and 819 sections.
– The new Bill includes 57 tables, eliminating unnecessary explanations found in the old Act.

Overall, the new Income Tax Bill is designed to make paying taxes easier for everyone.