Income Tax Bill, 2025, withdrawn; new version coming on Monday
What's the story
The government has withdrawn the Income Tax Bill, 2025, which was tabled in the Lok Sabha on February 13 to replace the six-decade-old Income-Tax Act, 1961. Officials said the withdrawal was intended to avoid confusion caused by several versions of the legislation and to ensure that parliamentarians receive a single, consolidated draft that includes all suggested amendments. A revised version will be introduced on August 11, incorporating recommendations from a Select Committee headed by Bharatiya Janata Party MP Baijayant Panda.
Old version
Old bill too complex
"The current Income Tax Act, 1961 has undergone more than 4,000 amendments and contains over 5 lakh words. It has become too complex. The new bill simplifies that by nearly 50 per cent -- making it far easier for ordinary taxpayers to read and understand," Panda told IANS. He went on to say that small business owners and MSMEs will benefit the most from this simplification because they frequently lack the legal and financial expertise to handle complex tax structures.
Bill details
Highlights of new Income Tax Bill
The revised Income Tax Bill, 2025, is expected to modernize India's direct tax system and simplify compliance. According to CNN-News18 sources, it has been drafted on a 600-page document with 23 chapters, 16 schedules, and 536 clauses. The bill proposes replacing "assessment year" and "previous year" with "tax year," starting from April 1, 2026. However, no changes have been made to the short-term capital gains tax duration or rate.
Bill objectives
Bill aims to reduce legal disputes, remove ambiguities
The new Income Tax Bill also seeks to simplify tax provisions with clearer language and reduce legal disputes by removing ambiguities. It aims to make compliance easier for individuals and businesses while promoting a trust-based tax system where scrutiny comes later. Finance Minister Nirmala Sitharaman earlier said the bill would embody the philosophy of "Nyaya," focusing on clarity and simplicity. "The new bill will be clear and direct in text with close to half of the present law," she said.
Parliamentary proceedings
Government ready to discuss issues under rules: Rijiju
Lok Sabha proceedings were adjourned for the day amid raucous demonstrations by the opposition demanding a debate of the ongoing revision of electoral rolls in Bihar. In response, Parliamentary Affairs Minister Kiren Rijiju said it's unfortunate that time is being wasted when private member bills were to be taken up. He added opposition parties should not claim that the government did not cooperate because it has stated from the start that it is open to discuss all matters under rules.