Today, February 13, Finance Minister Nirmala Sitharaman will present the new Income-Tax Bill 2025 to the Lok Sabha. The purpose of the bill is to update and combine the nation’s tax laws. According to the official agenda for Thursday’s parliament session, “Smt. Nirmala Sitharaman will move for leave to introduce a bill to consolidate and amend the law relating to income tax.”
The six-decade-old Income Tax Act of 1964, which has grown more extensive as changes have been introduced over time, is intended to be replaced by the new income tax bill. The new bill merely clarifies the wording of the current Income Tax Act; it does not impose any new levies. It is anticipated that the new law will take effect in the start of April 2026.
Experts predict that the new Bill will enhance compliance, decrease litigation, and remove a number of “obsolete” provisions from the current Act. Additionally, it is anticipated that the tax regulations will be made simpler, more transparent, and more user-friendly for taxpayers.
In an effort to make the paper easier to read, the measure will also substitute the simplified word “tax year” for terms like assessment and prior year. The current assessment concept and the prior year will be replaced by the tax year, which is the 12-month period starting on April 1. At the moment, the “assessment year” is used to evaluate income received in the “previous year.” Income earned between April 2024 and March 2025, for instance, is now evaluated in FY 2025–2026.
Duplicate portions, such as those pertaining to the Fringe Benefit Tax, have been left out of the revised draft. It is simpler to read and understand because it lacks “explanations or provisos.” The new Bill eliminates the word “notwithstanding,” which was overused in the previous Income Tax Act. It has been replaced by the word ‘irrespective’ practically everywhere.
