The government has published a copy of the much-anticipated Income-Tax Bill, 2025. It is expected to be tabled in the Parliament on February 13. The bill aims to simplify tax laws and modernise compliance structures. It new bill lists out 23 chapters, 16 schedules, and 536 clauses covering a wide range of tax provisions.
One of the significant changes is the introduction of simpler terminology, with the ‘Tax Year’ replacing ‘Assessment Year’ and ‘Financial Year’ replacing ‘Previous Year’. The Tax Year will represent a 12-month period starting from April 1, aligning it with the financial year framework.
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The new Income Tax Bill also addresses the evolving financial landscape by expanding definitions related to digital transactions and crypto assets. Additionally, it includes specific references to ‘Finance Companies’ and ‘Finance Units’ in the context of dividends, which could have implications for financial institutions and investors.
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A notable compliance reform is the introduction of a Taxpayer’s Charter, which is expected to enhance transparency and safeguard taxpayer rights. Furthermore, the bill contains a detailed section suggesting that foreign companies could be deemed as residents, potentially altering tax liabilities for global businesses operating in India.
New Income Tax Bill: Here are some of the key details you need to know: Tax Slabs Under New Tax Regime
Up to Rs 4,00,000: No tax to be levied.
From Rs 4,00,001 to Rs 8,00,000: The tax rate is 5%.
From Rs 8,00,001 to Rs 12,00,000: The tax rate is 10%.
From Rs 12,00,001 to Rs 16,00,000: The tax rate is 15%.
From Rs 16,00,001 to Rs 20,00,000: The tax rate is 20%.
From Rs 20,00,001 to Rs 24,00,000: The tax rate is 25%.
Above Rs 24,00,000: The tax rate is 30%
Salary Deductions
- Under the old tax regime, employees can claim a standard deduction of Rs 50,000 or their salary amount, whichever is lower.
- The tax paid by the assessee on employment,
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