The Bill, expected to be presented in Parliament on Thursday, introduces a new concept of the ‘tax year,’ defining it as a 12-month period starting from April 1.
The new Income-Tax Bill 2025, set to be introduced in Parliament on Thursday, aims to simplify tax laws with clearer language, fewer provisos, and streamlined deductions. The Bill reduces cross-referencing between sections, making it easier for taxpayers to understand.
Key Changes in the New Bill:
✅ Introduction of ‘Tax Year’ – A 12-month period starting April 1, replacing the term ‘Assessment Year.’
✅ Simplified Language – Provisions rewritten for clarity, with outdated references removed.
✅ Virtual Digital Assets as Capital Assets – Now included alongside land, buildings, securities, and artworks.
✅ Consolidated Deductions – Standard deduction, gratuity, and leave encashment grouped for better clarity.
✅ Dispute Resolution Panel (DRP) Clarity – Clearer guidelines on decision-making and dispute resolution.
✅ Removal of Obsolete Provisions – Sections like 54E (capital gains exemptions before 1992) have been eliminated.
✅ Structured Tax Provisions – TDS rates, assessment timelines, and revenue recognition have been neatly tabulated.
The Bill shrinks from 823 pages to 622 pages, despite having more clauses (536 vs. 298 sections in the 1961 Act). The number of schedules has also increased from 14 to 16.
The old tax regime remains, ensuring continuity alongside the new system. Experts believe this restructuring reduces complexity, minimizes litigation, and makes compliance easier.
Approved by the Cabinet last week, the Bill will now go through parliamentary review before final implementation, expected by April 1, 2026.