New Income Tax Bill 2025: New Income Tax Bill to be introduced in Lok Sabha on Thursday; How will it affect taxpayers?:

New Income Tax Bill 2025: New Income Tax Bill to be introduced in Lok Sabha on Thursday; How will it affect taxpayers? The Union Cabinet  approved the new income tax bill on Friday, February 7, 2025. The new direct tax code is anticipated to be introduced to the Lok Sabha this week. The new tax bill is part of a bigger attempt to reform the country's tax system, with the goal of overhauling the current tax structure to improve its efficiency and transparency. According to reports, the Union Cabinet, led by Prime Minister Narendra Modi, cleared the new Income Tax Bill last week, citing sources. The bill will now be tabled to Parliament this week and forwarded to the Standing Committee on Finance for further consideration, the statement indicated.

How New Bill will affect Taxpayers?

The new income tax bill has been proposed to replace the Income Tax Act 1961, which is approximately sixty years old. The proposed bill will use simpler language to help taxpayers. According to a report, the new Income Tax bill might cut the number of sections by 25-30% in an effort to streamline tax rules and it clauses. Sources said simplifying the language will make the Act more succinct, clear, and understandable, resulting in fewer disputes and litigations and increased tax certainty for taxpayers. The new tax structure proposed is good as it “simplifies tax for the majority". The new bill is meant to simplify existing tax regulations, making them clearer and understandable to taxpayers. The Income Tax Department will actively solicit comments from taxpayers, industry participants, and other stakeholders in order to identify and effectively address controversial issues. The department should issue fast clarifications and circulars in response to stakeholder concerns, building confidence and transparency. The bill should encourage the use of sophisticated technologies such as artificial intelligence and data analytics to improve tax compliance and administration for taxpayers. With simpler guidelines, the compliance process should be expedited which help the taxpayers to warp up things quickly. Prioritize reducing paperwork, integrating digital platforms, and streamlining return filing processes. To reduce litigation, the government must address disputed areas of present legislation. A simple and comprehensive tax code promotes certainty and reduces disputes among taxpayers. The CBDT established an internal committee to oversee the review. In addition, 22 specialized sub-committees have been established to study the many components of the new law, which will replace the six-decade-old law. Prior to drafting the bill, the government sought public comments in four categories: language simplification, litigation reduction, compliance reduction, and redundant/obsolete provisions.