Income Tax Bill / Why was the new Income Tax Bill introduced in the country? The IT Department itself told

Income Tax Bill: On Thursday, the new Income Tax Bill-2025 was introduced in the Parliament of the country, which is proposed to replace the existing Income Tax Act-1961. This bill will now be under the consideration of the Parliamentary Committee and later it will be passed by both the Houses of Parliament. If this bill becomes law, it will bring significant changes in the tax system.

Why is the new bill needed?

The existing Income Tax Act-1961 has undergone several amendments over the decades, making this law complex and detailed. The need for a new bill was felt because:

Reducing legal complexity:

The current law has 819 effective sections, which have been reduced to 536.

The number of chapters has been reduced from 47 to 23.

1,200 provisions and 900 explanations have been removed.

Reduction in litigation:

The new provisions have been made clear and simple so that the need for legal interpretation is reduced.

Minimal amendments have been made to key words and phrases keeping in mind the decisions given by the courts.

Ensuring fixed tax collection:

The government wants to motivate taxpayers to pay taxes themselves.

The goal is to increase the compliance rate by making the tax structure transparent and easy.

Key features of the new bill

Simplification of provisions related to salary:

Provisions like gratuity, leave encashment, commutation of pension, VRS compensation and retrenchment compensation have been kept in one place.

This will save taxpayers from wandering between different chapters.

FAQs issued by Income Tax Department:

Frequently Asked Questions (FAQs) have been issued to inform the general public about the new bill.

In this, the provisions of the bill have been explained in simple language.

Structure of the amended bill:

The bill contains 2.6 lakh words, which is half of the 5.12 lakh words of the existing Income Tax Act.

57 schedules have been added to it, which makes it more streamlined.

Way forward

Introducing the bill in the Lok Sabha, Finance Minister Nirmala Sitharaman said that this bill is a big step towards tax reform. It has been sent to the Select Committee of the Lok Sabha, which will submit its report by March 10. After this, the process of passing the bill from Rajya Sabha and Lok Sabha will be completed.

The new Income Tax Bill-2025 is an important initiative towards transparency, tax compliance and legal simplification. If it becomes law, it will prove to be helpful in making the tax process easier for taxpayers and ensuring fixed revenue collection for the government.