The Union Cabinet, led by Prime Minister Narendra Modi, approved the new Income Tax Bill on Friday. According to sources, the new bill is likely to be tabled in Parliament on Monday. It is set to replace the six-decade-old Income Tax Act, 1961 and aims to simplify and modernize the nation’s current tax system while making compliance easier for taxpayers.
It may be noted that in her Budget 2025 speech on February 1, Finance Minister Nirmala Sitharaman indicated that a new Income Tax Bill will be presented in Parliament ‘next week’. The new Income-Tax Bill will be clear and direct in text so as to make it simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation.
While underlining taxation reforms as one of key reforms to realize the vision of Viksit Bharat, the FM had stated that the new income tax bill will carry forward the spirit of ‘Nyaya’. “The new regime will be simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation,” she informed.
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Key Features
According to CA Club India, the New Income Tax Bill may have the following features:
No New Taxes: The New Income Tax Bill will not introduce any new taxes and focus on simplifying the existing tax laws.
Concise Legislation: The new law is expected to be 50% shorter than the existing one by eliminating redundant provisions and reducing ambiguity.
Simplified Language: Legal language will be made more accessible, ensuring that taxpayers can understand provisions without complexity.
Litigation Reduction: By clarifying exceptions to anti-abuse provisions and removing outdated clauses, the new bill aims to reduce tax disputes.
Lower Penalties: There may be provisions to introduce lower penalties for certain offences,
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