The Indian government is set to introduce the new Income Tax Bill, 2025, in the Lok Sabha on February 13, 2025. This comprehensive 622-page legislation comprises 536 clauses, organized into 23 chapters and 16 schedules. The bill aims to simplify the existing Income Tax Act of 1961, making it more concise and easier to understand. The Union Cabinet approved the bill on February 7, 2025, and it is expected to be referred to the Parliament’s Standing Committee on Finance for further deliberation.
Finance Minister Nirmala Sitharaman had announced a comprehensive review of the six-decade-old Income Tax Act in her July 2024 budget speech, with the goal of reducing disputes and litigation, thereby providing greater tax certainty to taxpayers. Following this, the Central Board of Direct Taxes (CBDT) established an internal committee and 22 specialized sub-committees to review various aspects of the Act. Public inputs were invited in categories such as simplification of language, litigation reduction, compliance reduction, and removal of redundant provisions, resulting in over 6,500 suggestions from stakeholders.
The new bill seeks to reduce the volume of the existing law by about 60%, eliminating obsolete provisions and making the direct tax law simpler to understand without imposing any new tax burdens. It avoids the use of provisos, explanations, or long sentences, aiming for clarity and ease of comprehension.
The Budget session of Parliament is scheduled from January 31 to April 4, 2025, with a recess between February 13 and March 9. The first half includes the President’s address to the joint sitting of both houses and the presentation of the Economic Survey for 2024-25, followed by the Union Budget for 2025-26 on February 1. The introduction of the new Income Tax Bill is anticipated in the second half of the session, commencing on March 10.
This legislative move represents a significant step towards modernizing India’s tax framework, aiming to make it more transparent and taxpayer-friendly.
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Income-tax Bill, 2025, tabled in Parliament today towards achieving comprehensive simplification of the Income-tax Act, 1961
The Income-tax Bill, 2025 was tabled in Parliament today, marking a significant step toward simplifying the language and structure of the Income-tax Act, 1961.
The simplification exercise was guided by three core principles:
- Textual and structural simplification for improved clarity and coherence.
- No major tax policy changes to ensure continuity and certainty.
- No modifications of tax rates, preserving predictability for taxpayers.
A three-pronged approach was adopted:
- Eliminating intricate language to enhance readability.
- Removing redundant and repetitive provisions for better navigation.
- Reorganizing sections logically to facilitate ease of reference.
Consultative and Research-Based Approach
The Government ensured widespread stakeholder engagement, consulting taxpayers, businesses, industry associations, and professional bodies. Out of 20,976 online suggestions received, relevant suggestions were examined and incorporated, where feasible. Consultations were held with industry experts and tax professionals and simplification models from Australia and the UK were studied for best practices.
Outcomes of the Simplification Exercise Quantitative
Impact
The review has led to a substantial reduction in the Act’s volume, making it more streamlined and navigable. Key reductions are summarized below:
| Item | Existing Income-tax Act, 1961 | Proposed in the Income-tax Bill, 2025 | Change (Reduction/ Addition) |
| Words | 512,535 | 259,676 | Reduction: 252,859 words |
| Chapters | 47 | 23 | Reduction: 24 chapters |
| Sections | 819 | 536 | Reduction: 283 sections |
| Tables | 18 | 57 | Addition: 39 tables |
| Formulae | 6 | 46 | Addition: 40 formulae |
Qualitative Improvements
- Simplified language, making the law more accessible.
- Consolidation of amendments, reducing fragmentation.
- Removal of obsolete and redundant provisions for greater clarity.
- Structural rationalization through tables and formulae for improved readability.
- Preservation of existing taxation principles, ensuring continuity while enhancing usability.
The Income-tax Bill, 2025 reflects the Government’s commitment to enhancing ease of doing business by providing a tax framework that is simple and clear.
Also Read:
New Income Tax Bill 2025: General FAQs and Broad Scope
New Income Tax Bill 2025: FAQs on Key Changes
New Income-Tax Bill 2025: Section Mapping & Updates
Income Tax Bill 2025: Executive Summary on Income Tax Act Simplification
option is not there to download
Its there at the end of Post
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where is the bill ? download option not working
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