Image Source : INDIA TV The Cabinet, chaired by Prime Minister Narendra Modi, approved the New Income Tax Bill.
New Income Tax Bill: The Union Cabinet on Friday approved the New Income Tax Bill, which is set to replace the six-decade-old Income Tax Act, news agency PTI reported citing sources. The new legislation aims to make direct tax laws simpler and easier to understand, while ensuring that no additional tax burden is imposed on taxpayers. According to sources, the bill seeks to eliminate complex provisos, explanations, and lengthy sentences, making the tax structure more transparent and accessible. The proposal was approved during a Cabinet meeting chaired by Prime Minister Narendra Modi, as per sources.
The New Income Tax Bill is expected to be introduced in the Parliament next week and would be sent to Parliament’s Standing Committee on Finance. The first leg of the ongoing budget session ends on February 13. The session will reconvene on March 10 and sit through April 4.
Finance Minister Nirmala Sitharaman had announced in Budget 2025-26 that the new tax bill will be introduced in the ongoing session of Parliament. Sitharaman had first announced a comprehensive review of the Income-tax Act, 1961 in July 2024 Budget.
Internal committee to oversee the review
The CBDT had set up an internal committee to oversee the review and make the Act concise, clear, and easy to understand, which will reduce disputes, litigations, and provide greater tax certainty to taxpayers. Also, 22 specialised sub-committees have been established to review the various aspects of the Income Tax Act. Public inputs and suggestions were invited in four categories — simplification of language, litigation reduction, compliance reduction, and redundant/obsolete provisions. The income tax department has received 6,500 suggestions from stakeholders on the review of the Income Tax Act.
What New Income Tax Bill proposes to do?
The new law is expected to be leaner and more reader-friendly, which even a common man could comprehend. The intention of the government is to halve the volume and make the language simpler so that taxpayers can know their exact tax liability. It would also help in reducing litigations and thereby cut down on disputed tax demands. Income tax law was enacted about 60 years ago in 1961 and since then a lot of changes have taken place in the society, in the way people earn money and companies do business.
(With PTI inputs)
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