Image Source : PIXABAY When the Income Tax Act, 1961, was brought in, it had 880 pages.
New Income Tax Bill: Finance Minister Nirmala Sitharaman, in her 2025-26 Budget speech, announced that the government will introduce a new Income Tax Bill in the Parliament. The new Income Tax Bill will replace the six-decade-old Income Tax Act of 1961. The Bill is expected to be introduced in the Lok Sabha on Thursday.
After the introduction, the bill will be sent to a parliamentary standing committee for scrutiny.
New Income Tax Bill: Crispier and simplified
The Income Tax Bill 2025 will be a crispier and simplified version of the Income Tax Act of 1961 – which over the years became bulkier and complex with amendments.
The Income Tax Bill, 2025 comprises 536 sections, higher than 298 sections of the current Income-Tax Act, 1961.
The existing law has 14 schedules which will increase to 16 in the new legislation.
However, the number of chapters has been retained at 23. The number of pages has been reduced substantially to 622, almost half of the current voluminous Act which includes amendments made over the last six decades.
When the Income Tax Act, 1961, was brought in, it had 880 pages.
New Income Tax Bill: Changes
The proposed law replaces the term ‘previous year’ with ‘tax year’. Also, the concept of assessment year has been done away with.
Currently, for income earned in the previous year (say 2023-24), tax is paid in the assessment year (say 2024-25). This previous year and assessment year concept has been removed and only tax year under the simplified bill has been brought in.
As per the proposed law, clearer tax treatment on stock options (ESOPs) has been included for reduced tax disputes and includes judicial pronouncements of the last 60 years for more clarity.
As per new law, the CBDT can now frame tax administration rules, introduce compliance measures, and enforce digital tax monitoring systems without requiring frequent legislative amendments as per Clause 533.
With PTI inputs
