New Income Tax Bill Unlikely to Be Presented in Budget 2025:

New Income Tax Bill Unlikely to Be Presented in Budget 2025

The Finance Ministry is unlikely to present the new Income-Tax Bill during Budget 2025. Although the Finance Minister announced in July 2024 that the current Income-Tax Act would be reviewed, it seems the new bill will not be ready for the budget session. An internal committee, headed by Chief Income-Tax Commissioner V.K. Gupta, has been studying the Income-Tax Act of 1961 and is likely to come out with its report by February 1, 2025, when the Budget is presented. Sources indicated that the bill will not be passed during the Budget session. The legislation will then be prepared in consultation with the law ministry after the committee submits its report. This will now be sent to the Standing Committee on Finance for a detailed consideration of examination with suggestions. Given that the period of review has been only six months and is already at the close of January 2025, proposing the new Income-Tax Act in the Budget session this year may be considered too soon, as the priority is an elegant, brief, and legible version rather than on altering tax rates. The committee is expected to finish all 23 reports on the 1961 Income-Tax Act by mid-December 2024. These reports focus on simplifying important areas to make the law easier for taxpayers. Key topics include compliance, exemptions under Section 10, income from trusts (Sections 11–13), penalties, removing unnecessary rules, and the rules for TDS and TCS. Eight reports have already been submitted to the Central Board of Direct Taxes (CBDT), while sub-committees are working intensively on finalizing the remaining drafts. Over 80 officials are involved in this extensive review, with public input being sought through an online portal. Understanding the Income-Tax Act of 1961 This would be the Income-Tax Act of 1961 forming the backbone of India's tax structure. It provides with the income tax, and its imposition, collection and administration. The law derived from the Income Tax Act of 1922 currently having 298 sections and 23 chapters, hence provides complete guidance to the Indian Tax System. The heads that come under the Act are as follows:

• Charge of Income Tax: It charges total income in different taxpayer categories.
• Heads of Income: This is classified into five heads: salaries, house property, business or profession, capital gains, and other sources.
• Tax Rates: This prescribes the rates for different income levels and entities.
• Deductions and Exemptions: This gives provisions to reduce taxable income.
• Assessment and Collection: It describes the procedures of filing returns, assessments, and collection of taxes.
• Penalties and Interest: It imposes penalties and interest for non-compliance.

The review is focused on making this voluminous enactment more contemporary in nature and user-friendly for taxpayers. At the same time, in the course of the review, the bringing of the new Income-Tax Bill might take more time and deliberation.