- By Aditya Pratap Singh
- Wed, 12 Feb 2025 01:48 PM (IST)
- Source:JND
The new Income Tax Bill, which replaces the Income Tax Act of 1961, is expected to be introduced in Lok Sabha, the lower house of parliament, tomorrow i.e. Thursday. As per reports, it will come into force in April 2026 and is expected to bring significant change in the country's taxation system. Finance Minister Nirmala Sitharaman made this announcement during her Budget 2025 speech on February 1. The 622-page bill, once enacted, will be referred to as the Income Tax Act of 2025.
Why the new Income Tax Bill?
Over the past decades, the Income Tax Act of 1961 has undergone countless amendments, and this has dealt with its complexities in a way that tax compliance has become very difficult for taxpayers. The proposed new Income Tax Bill is being promoted to:
- Simplify tax provisions by using good English
- Reduce litigation and dispute in tax matters
- Make compliance easier for individuals and businesses
- Promote a trust-based taxation system, which can lead to less scrutiny later
The Union Cabinet has approved the Bill for recommendations after deliberations on February 7. It is likely to be introduced in the Lok Sabha on Thursday. After being passed in the Lok Sabha, the Bill will go to the Parliament's Standing Committee on Finance for further discussions and recommendations.
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How will it impact the taxpayer?
The whole idea behind this is that simpler laws will mean less compliance for the taxpayer. Bringing in clear terminology will improve understanding for citizens and businesses in the years to come.
A new philosophy for taxation
Presenting the provisions of the bill, Sitharaman said it has inspired philosophical discussion from the perspective of justice, which has also inspired the Indian Judicial Code, a law that is set to replace the Indian Penal Code, of 1860, in 2024.
