Mumbai, February 6: The government is set to introduce a new Income Tax Bill in Parliament this week, aiming to replace the existing Income Tax Act of 1961. The new bill is designed to simplify the complex tax structure, making the process clearer and more streamlined. Over the past six decades, the Income Tax Act has undergone numerous changes through annual budget revisions, adjusting tax rates, introducing new provisions, and modifying exemptions.

During the Union Budget presentation on February 1, Finance Minister Nirmala Sitharaman announced the introduction of this bill in Parliament next week. This marks a significant reform in India’s tax system, as the new law will replace the outdated legislation after nearly 60 years, ensuring a more modern and efficient tax framework.  It is expected to be presented in the parliament on 7 February 2025. New Income Tax Bill To Be Introduced Next Week, Announces FM Nirmala Sitharaman While Presenting Union Budget 2025-26 (Watch Video).

When and Why Is New Tax Bill Being Introduced?

During the Union Budget presentation on February 1, Finance Minister Nirmala Sitharaman announced the introduction of this bill in Parliament next week.It is expected to be presented in the parliament on 7 February 2025.

Finance Minister Nirmala Sitharaman announced in the 2024 Budget that the Income Tax Act, 1961, would be reviewed to make it simpler and more concise. The goal is to reduce tax disputes, improve compliance, and offer greater clarity to taxpayers. How New Income Tax Slabs and Rates, Announced in Budget 2025, Are Different From Current Income Tax Slabs and Rates Under Old and New Regimes.

A key reason behind this reform is to reduce tax-related disputes and litigation. By ensuring greater clarity in tax regulations, the government aims to enhance compliance and provide taxpayers with a more transparent and predictable tax system.

To ensure inclusivity, the government invited public suggestions on the new law. In the 2025 Budget, Sitharaman reaffirmed that the bill would be introduced soon, emphasizing fairness and justice, much like the Bharatiya Nyaya Sanhita, which replaced the Indian Penal Code in 2024.

What Changes To Expect in the New Income Tax Bill?

The new Income Tax Bill will have fewer provisions, making it easier for taxpayers and authorities to understand. It aims to simplify the tax structure, reduce disputes, and improve compliance. Expected changes include clearer rules for determining residential status, a more straightforward tax framework with nearly half the provisions of the current law, and easier tax filing procedures. These reforms will enhance transparency and make taxation more efficient.

How Is It Beneficial?

The new Income Tax Bill will simplify the tax structure by reducing deductions and exemptions, making it easier to understand. It will streamline tax laws, ensuring better compliance and fewer legal ambiguities. By rationalizing tax rates to match global standards, it will attract both domestic and foreign businesses. Additionally, the simplified framework is expected to reduce legal disputes, making taxation more transparent and hassle-free for individuals and businesses.

(The above story first appeared on LatestLY on Feb 06, 2025 11:44 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).