On Tuesday, Finance Minister Nirmala Sitharaman told the Lok Sabha that the new Income Tax Bill could be up for discussion in the upcoming monsoon session of Parliament. She shared this update during the debate on the Finance Bill, 2025. Sitharaman mentioned that a select committee has been formed to review the ‘Income Tax Bill, 2025’, which was established by Lok Sabha Speaker Om Birla on February 14. This committee consists of 31 members and is led by BJP MP Baijayant Panda.

 

The aim of the New Income Tax Bill

 

This bill is designed to simplify and modernize India’s tax system. It seeks to replace the Income Tax Act of 1961, making it easier for taxpayers to navigate. Importantly, the bill does not introduce any new taxes; instead, it focuses on simplifying the legal language so that taxpayers can better understand the rules. This will also streamline the compliance process for everyone involved.

 

Key features of the new Income Tax Bill

 

Easier tax regulations: The tax system will be revamped to be more straightforward and user-friendly. Outdated and complicated provisions will be eliminated in favor of clear and simple rules.

 

Faster tax dispute resolution: New measures will be introduced to expedite the resolution of tax-related issues. A digital system for resolving disputes will be implemented to help taxpayers avoid unnecessary legal hassles.

 

Enhanced powers for the CBDT: Previously, the Income Tax Department needed Parliament’s approval to roll out various tax schemes. However, the new bill will grant the Central Board of Direct Taxes (CBDT) the authority to independently initiate tax schemes, reducing bureaucratic delays and improving tax administration efficiency.

 

Digital Tax Monitoring: A fresh digital tax monitoring system is set to roll out. This will simplify tax compliance and help detect fraud more effectively.

 

Tax Exemptions and Deductions in the New Bill

 

Individuals with an annual income of up to Rs 12 lakh will not have to pay any taxes. The new tax regime allows for Rs 75,000 in exemptions, while the old regime offers Rs 50,000.