Budget 2025: Govt may replace Income Tax Act, 1961 with THIS new law! What it means for taxpayers

Budget 2025: Finance Minister Nirmala Sitharaman will present the second full-fledged budget of the Modi 3.0 government on February 1. The upcoming Union Budget 2025-26 is being eagerly anticipated, with the middle class hoping for significant tax reliefs.

Amidst all these expectations around the budget, reports are suggesting that the Centre may introduce the Direct Tax Code (DTC) 2025, a simplified version of the income tax laws soon. The DTC will be brought to replace the Income Tax Act, 1961.

The Direct Tax Code will overhaul the income tax laws, making them simpler and reducing legal complications and litigation for individuals, the government, and the industry.

Experts also cautioned that such significant reforms should not be rushed. They also recommend following a proper process, including releasing a draft and conducting public consultations. The changes may begin in stages through the upcoming budget and continue to evolve in the following months, they believe.

According to CA (Dr.) Suresh Surana, “The government may unveil a comprehensive overhaul of the income tax framework by introducing a new Direct Tax Code. This proposed system aims to simplify the tax structure, promote compliance, and align India’s tax policies with global standards.”

Also read: Budget 2025: Old Tax Regime to be completely scrapped?

What will change after DTC implementation?

The DTC will reduce the number of sections and chapters in the current Income Tax Act, remove outdated provisions, and simplify the language, aiming to make the law easier for both taxpayers and professionals to understand and follow.

The Income Tax Act, 1961, consists of 298 sections across 23 chapters, covering areas like personal income tax, corporate tax, and securities transaction tax. The new version of the Direct Tax Code is expected to be much shorter and clearer, streamlining these provisions for better understanding.

FM Sitharaman, in the Union Budget 2024, had proposed to revamp the Income Tax Act, 1961, to make it concise and easier to understand.

The 2025 Budget is expected to bring significant changes to the Income Tax Act to simplify the tax process. Complex income computation methods may be replaced with clear formulas, while the terms “assessment year” and “financial year” could be unified under a single “tax year” definition.

To make tax filing more convenient,

 » Read More

Related Articles

JB Pharma is riding the CDMO Opportunity. Jefferies reiterates buy…

Jefferies has maintained a Buy on JB Pharma with a revised target price of Rs 2,310. The stock currently trades at Rs 1,714/share implying an 34% upside. This new target price is just a shade lower than the previous target price of Rs 2,340. According to Jefferies, an international brokerage house, the growth drivers are

Two banking stocks to watch ahead of the RBI Policy

By Kiran Jani Bank Nifty reached its all-time high of 54,467 in September 2024. Following this peak, the index experienced a correction, dipping to 47,844 in January 2025—a decline of 7.29%. Despite this pullback, Kotak Bank and ICICI Bank showed relative resilience, delivering returns of 1.61% and -4.20%, respectively, during the same period. Source: Investing.com

New Tax Regime: These deductions, exemptions still available for you

The Indian government introduced a new tax regime in 2020, offering lower tax rates while removing several exemptions and deductions available under the old system. Initially optional, this regime became the default in 2023, requiring taxpayers to opt out if they wished to continue under the old structure. Despite the removal of many benefits, certain

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

0FansLike
0FollowersFollow
0SubscribersSubscribe
- Advertisement -

Latest Articles

JB Pharma is riding the CDMO Opportunity. Jefferies reiterates buy…

Jefferies has maintained a Buy on JB Pharma with a revised target price of Rs 2,310. The stock currently trades at Rs 1,714/share implying an 34% upside. This new target price is just a shade lower than the previous target price of Rs 2,340. According to Jefferies, an international brokerage house, the growth drivers are

Two banking stocks to watch ahead of the RBI Policy

By Kiran Jani Bank Nifty reached its all-time high of 54,467 in September 2024. Following this peak, the index experienced a correction, dipping to 47,844 in January 2025—a decline of 7.29%. Despite this pullback, Kotak Bank and ICICI Bank showed relative resilience, delivering returns of 1.61% and -4.20%, respectively, during the same period. Source: Investing.com

New Tax Regime: These deductions, exemptions still available for you

The Indian government introduced a new tax regime in 2020, offering lower tax rates while removing several exemptions and deductions available under the old system. Initially optional, this regime became the default in 2023, requiring taxpayers to opt out if they wished to continue under the old structure. Despite the removal of many benefits, certain

Range bound session: Nifty ends above 23,600, Sensex holds 78,000 led by Adani Ports, Infosys

The stock markets faced a downturn on Thursday, with major indices closing in the red. The BSE Sensex dropped by 213.12 points or 0.27%, ending the day at 78,058.16, while the NSE Nifty 50 saw a decline of 70.15 points, down by 0.3%, and closed at 23,626.15. The Nifty Bank index also ended the day

IT stocks stable as Cognizant raises annual and quarterly revenue guidance

Shares of Indian IT companies are in the spotlight today after the Nasdaq-listed IT services major Cognizant Technology Solutions, reported its Q4 results that exceeded Wall Street expectations. The Nifty IT Index as well as individual tech counters like Infosys, Wipro, Tech Mahindra and HCL Tech are all in the green even as the markets