Finance Minister Nirmala Sitharaman will introduce Income-Tax Bill 2025 in Lok Sabha on February 13.
Finance Minister Nirmala Sitharaman will introduce the revised Income-Tax Bill 2025 to the Lok Sabha on February 13. The bill intends to consolidate and modernize the country’s taxes legislation.
“Smt. Nirmala Sitharaman to move for leave to introduce a bill to consolidate and amend the law relating to income-tax,” according to the official list of business for the parliament session on Thursday.
The new income tax bill intends to replace the six-decade-old Income Tax Act of 1964, which has grown in size as changes were added over time. The new Bill does not impose new taxes, but rather simplifies the text of the current Income Tax Act. The new law is planned to go into force in the beginning of April 2026.
Removal of ‘obsolete’ portions
According to experts, the new Bill will repeal some ‘obsolete’ provisions of the current Act, reducing litigation and improving compliance. It is also expected to streamline tax regulations, making them more clear, easy to understand, and taxpayer friendly.
Income-Tax Bill 2025: Simplified language
As part of the effort to make the document more understandable, the law will also replace terms like assessment and prior year with a simpler concept of ‘tax year’. The tax year, which begins on April 1 and lasts 12 months, will replace the current idea of assessment and prior year. Income earned in the ‘prior year’ is now assessed in the ‘assessment year’. For example, revenue generated between April 2024 and March 2025 is now assessed in Fiscal Year 2025-26.
The new bill eliminates unnecessary parts, such as those dealing to the Fringe Benefit Tax. It is free of ‘explanations or provisos’, making it easier to read and understand. The word ‘notwithstanding’, which was used excessively in the previous Income Tax Act, has been eliminated in the new Bill. It has been almost completely supplanted by the phrase ‘irrespective’.
