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New Income Tax Bill 2025: The Bill seeks to replace 298 sections and 14 schedules in the existing Income Tax Act, 1961, with a 622-page new law enshrined in 536 sections, 23 chapters and 16 schedules.
New Income Tax Bill proposes to replace the words ‘assessment year’ and ‘previous year’ with just one word ‘tax year’.
New Income Tax Bill 2025 PDF: Finance Minister Nirmala Sitharaman on Thursday introduced the new Income Tax Bill 2025, in the Lok Sabha, to simplify the language of the income tax law while removing provisos and explanations. It also seeks to replace terminologies like assessment and previous year with easier-to-understand ‘tax year’.
After introducing the Bill in the Lok Sabha, the finance minister urged the Speaker to refer it to the select committee.
Income Tax Bill 2025 PDF Download
The Income Tax Bill 2025 PDF can be downloaded from here (https://sansad.in/ls/legislation/bills).
Income Tax Bill, 2025: Key Changes & Highlights
The Income Tax Bill, 2025, will repeal and replace the Income Tax Act, 1961.
The Income Tax Bill, 2025 will replace 298 sections and 14 schedules in the six-decade-old Income Tax Act, 1961, with a 622-page new law enshrined in 536 sections, 23 chapters and 16 schedules.
The Bill introduces a new concept of ‘tax year’ as the 12-month period beginning from April 1. This would replace the present concept of assessment and previous year.
The new bill has omitted redundant sections, like those relating to Fringe Benefit Tax. The Bill is free from ‘explanations or provisos’, thereby making it easier to read and comprehend.
Also, the word ‘notwithstanding’, which was used excessively in the Income Tax Act, 1961, has been done away with in the new Bill and almost everywhere replaced with the term ‘irrespective’.
The Bill uses shorter sentences and has been made reader-friendly with the use of tables and formulae. Tables have been provided for provisions relating to TDS, presumptive taxation, salaries, and deductions for bad debt .
The ‘Taxpayer’s Charter’ has been included in the Bill which outlines the rights and obligations of the taxpayers.
The Income Tax Bill, 2025, comprises 536 sections, higher than 298 sections of the current Income-Tax Act, 1961. The existing law has 14 schedules which will increase to 16 in the new legislation.
However, the number of chapters have been retained at 23. The number of pages has been reduced substantially to 622, almost half of the current voluminous Act which includes amendments made over the last six decades.
The Statement of Objects and Reasons of the new I-T Bill said that the Income-tax Act passed in 1961 has been subjected to numerous amendments since its passage 60 years ago.
“As a result of these amendments, the basic structure of the Income Tax Act has been overburdened and language has become complex, increasing cost of compliance for taxpayers and hampering efficiency of direct-tax administration,” it said.
When the Income Tax Act, 1961, was brought in, it had 880 pages.
As per the proposed law, clearer tax treatment on employees’ stock options (ESOPs) have been included for reduced tax disputes and it includes judicial pronouncements of the last 60 years for more clarity.
Also, income not forming part of total income have now been moved to schedules to simplify the statute.
