The new Income Tax Bill which seeks to simplify the over-six-decades-old principal legislation on direct laws, will be taken up for discussion in the monsoon session of Parliament, finance minister Nirmala Sitharaman said on Tuesday.
This indicates that the Bill may be pushed for consideration and passing in the next session, which typically commences in July. Introduced in the House on February 13, the Bill is currently being vetted by the select committee.
Meanwhile, the Lok Sabha on Tuesday approved the Finance Bill 2025 along with amendments, including one that abolishes a 6% equalisation levy on online advertisements.
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Last week, the Central Board of Direct Taxes (CBDT) asked stakeholders to continue submitting their suggestions on the Bill. The board had said an effort was underway to collect inputs and work on simplification of the associated income tax rules and forms.
The I-T Bill is noted for its language that is “easier to understand” and re-grouping of some of the sections for easy reference. However, no change has been proposed in tax rates or key tax provisions like residency rules, capital gains taxation, general anti-avoidance rules, transfer pricing, TDS/TCS rates etc.
The proposed law seeks to replaces the term “previous year” as mentioned in the extant law with “tax year” that is aligned with the financial year (April-March). The concept of assessment year will be done away with. Further, all sections related to tax deducted at source (TDS) have been combined under a single clause, and retained a Charter that seeks to buttress taxpayers’ rights.
The select committee has invited the suggestions from stakeholders in the following categories: simplification of language, reduction of litigation, reduction of compliance burden, and identification of redundant/obsolete rules and forms. Experts say that the committee’s effort to engage with stakeholders will help identify practical challenges and ensure that the rules effectively serve their purpose. Well-structured rules and forms should simplify compliance while staying aligned with legislative intent, they say.
While seeking the House nod, finance minister Nirmala Sitharaman said the Finance Bill has offered “unprecedented tax relief” to honour taxpayers while rationalising customs tariffs to boost manufacturing, promote exports, and provide relief to the common man.
With the passage of the Finance Bill 2025,
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