Features of the New Amended Bill 2025: Shorter and Simplified

One of the most noticeable things about the new amendments made in the Income Tax Bill is that it has now been made much shorter and simpler in comparison to the initial one. According to the introduced amendments, the new Bill will have about 2.6 lakh (260,000) words, which is almost half the size of the current law that has 5.12 lakh (512,000) words. The number of sections will go down from 819 to 536, and the number of chapters will be reduced from 47 to 23. This simpler and shorter structure is meant to make the law easier to understand and use for both taxpayers and tax experts.

The sources said, “The aim is to modernise the tax system to match current economic realities and reduce ambiguities that often result in disputes and legal interpretation.”

Significant Amendments Introduced for Taxpayers

Among the introduced amendments, one of the biggest and most surprising amendments for taxpayers is the proposal to substitute terms like “previous year” and “assessment year” with a single term, i.e., “tax year”. This action is aimed towards lowering the confusion of taxpayers. This means people will earn income and file their taxes in the same financial year, making the process easier to understand.

The Bill also includes rules for using digital documents, simpler compliance instructions, and better ways to handle tax disputes. These updates show a move towards a more modern, digital, and efficient tax system.

The Select Committee of the Lok Sabha, headed by BJP MP Baijayant Panda, submitted a comprehensive 4,500-page report on the draft income tax bill with 566 suggestions in it. These recommendations are aimed towards making things simpler to understand.

Key Recommendations in Income Tax Bill

Below are some key Income Tax Bill recommendations:

Help for Homeowners:

• The report suggests a fairer way to calculate tax deductions on income from house property. It also recommends allowing homeowners to claim tax benefits on interest paid before construction is completed, even if the house is rented out.

Protection for Small Taxpayers:

• One recommendation is that people earning less than the taxable income limit shouldn’t have to file a tax return just to get a refund for tax already deducted (TDS).

Support for Businesses:

• The committee wants clearer tax rules for firms investing in research and development (R&D). It also suggests giving tax reliefs to businesses that handle biodegradable waste.

Less Legal Trouble:

• To reduce court cases, the report recommends bringing back phrases like “in the circumstances of the case” in tax laws. This would offer more protection and make tax rules fairer.

Despite all these recommendations, the new revised bill does not change existing tax rates or slabs. It is just aimed towards simplifying the legal framework.

With the final tabling anticipated to take place on August 11, taxpayers, businesses, and professionals are paying close attention to what could be the biggest tax reform in more than 60 years. If the new law is approved by Parliament, it is expected to come into effect on April 1, 2026.