Income Tax Bill 2025: Finance Minister Nirmala Sitharaman tabled the new direct tax code or the Income Tax Bill 2025 in Lok Sabha on Thursday.
The Income Tax Bill, 2025, will now be referred to Select Committee of Lok Sabha for further review. The Lok Sabha proceedings have been adjourned till March 10.
Finance Minister Nirmala Sitharaman asked Lok Sabha Speaker to form review committee for the the newly tabled Income Tax Bill 2025.
Earlier in the day, Lok Sabha proceedings were adjourned till 2 pm after Opposition members protested over allocation of a project to businessman in Gujarat.
This development is a stepping stone in implementing a new act to replace the 60-year-old Income Tax Act of 1961. The proposed legislation will be called the Income Tax Act 2025 and is expected to be implemented in April 2026. The bill aims to consolidate and amend the country’s taxation laws.
New Income Tax Bill introduced in Lok Sabha: What next?
Although the Income Tax Bill 2025 has been introduced in the Lok Sabha, it will take some time for it to be passed in the Parliament.
The I-T bill will now be sent to a committee for review. After evaluation, the committee will give its recommendation, and the Income Tax Bill 2025 will then be sent back to the government through the cabinet.
Later, the cabinet will consider the recommendations, and the I-T bill will again go to the Parliament.
“So once the Parliament after that passes it, that is when we will decide when best to roll it out,” said Nirmala Sitharaman earlier, adding that the bill will have to pass through three critical stages after cabinet nod.
Income Tax Bill 2025: What’s new for taxpayers?
-The key highlight of the Income Tax Bill 2025 is that it will consolidate India’s taxation laws and simplify them for taxpayers.
-The new tax code will remove several ‘obsolete’ sections of the existing Income Tax Act, reduce litigation, and improve compliance.
-The new bill will simplify language and will replace outdated terms with new ones which align with today’s economy.
-The Income Tax Bill 2025, will simplify tax laws for better clarity in taxation policies for businesses and non-profits. The changes are expected to make tax compliances easier.
-The bill brings changes related to deductions for investments, donations, and specific expenses. Earlier, Sections 10 and 80C to 80U of the Income Tax Act, 1961, allowed deductions for investments, donations, and specific expenses. According to ANI, the new bill, under Clauses 11 to 154, consolidates these deductions and introduces new provisions to support startups, digital businesses, and renewable energy investments.
