Image Source : SANSAD TV Finance Minister Nirmala Sitharaman
Finance Minister Nirmala Sitharaman on Thursday introduced the New Income Tax Bill in Lok Sabha. She urged the Lok Sabha Speaker to refer the Income Tax Bill, 2025, to the Select Committee of Lok Sabha. Opposition members opposed the Bill at the introduction stage but the House passed a motion by voice vote for its introduction.
The new bill does not bring in any new taxes, but only simplifies the language of the existing Income Tax Act, 1961. The new law is expected to come into effect from April 1, 2026.
Here’s everything you need to know
Income Tax Bill, 2025, simplifies the language, omits redundant provisions and uses shorter sentences.
The Bill does not impose any new taxes, only puts together the taxability provisions provided in the Income Tax Act, 1961.
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.
Includes both the old tax regime and the new tax regime for individuals, HUFs and others.
‘Tax year’ concept introduced and 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.
