Key highlights of Income Tax Bill, 2025
Finance Minister Nirmala Sitharaman introduced Income Tax Bill, 2025, in Lok Sabha today. Here are some key points of the new Bill
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- The Income Tax Bill, 2025, which seeks to replace the Income Tax, 1961, simplifies language, omits redundant provisions, uses shorter sentences
- The Bill does not impose any new taxes, only puts together the taxability provisions provided in the Income Tax Act, 1961
- It comprises 536 sections, 23 chapters and 16 schedules in just 622 pages. This compares with 298 sections, 23 chapters and 14 schedules in the 1961 Act
- New law to come into effect from April 1, 2026; rules to be put in place once Act is notified
- It includes both old tax regime and new tax regime for individuals, HUFs and others
- ‘Tax year’ concept introduced, complicated terms like ‘Previous year’ and ‘Assessment year’ omitted in the new Bill
- The word ‘notwithstanding’ removed, replaced with ‘irrespective’
- Does not refer to ‘explanations or provisos’, instead uses tables and formulae
- Taxpayer’s Charter, which outlines the rights and obligations of taxpayers, included in the Bill
- The Bill provides for special provision for capital gains computation in case of market-linked debenture
- Income not forming part of total income moved to Schedules to simplify the statute
- Deductions from salaries such as standard deduction, gratuity, leave encashment etc, tabulated at one place, instead of being scattered over different sections/rules
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