Big changes in the Indian tax system are about to start. The report on the new Income Tax Bill, 2025, will be presented in the Lok Sabha on Monday. This new bill will replace the old Income Tax Act, 1961. It will have fewer sections and will be written in simple language.
This New Tax Bill Has 285 Changes
According to a report in Business Today, a 31-member committee led by BJP leader Baijayant Panda was appointed by Lok Sabha Speaker Om Birla to review the new bill. This happened after Finance Minister Nirmala Sitharaman introduced the bill on February 13. The committee’s report suggests 285 changes in the new tax bill. The review report will now be presented in the House for further action. The new tax bill is half the size of the old Income Tax Act, 1961.
Fewer Sections and Simpler Language
The new bill has 536 sections instead of 816. It has been written in simple language to reduce disputes. According to the Income Tax Department, the word count in the new bill is 2.6 lakh compared to 5.12 lakh in the old law. The number of chapters has also been reduced from 47 to 23.
The New Tax Bill, 2025 has 57 tables to explain tax benefits and TDS/TCS rules, compared to only 18 in the old Act. Around 1,200 provisions and 900 clarifications have been removed. Another big change is that the old concept of ‘Assessment Year’ and ‘Previous Year’ will now be replaced by one term – ‘Tax Year’.
At present, income earned in one year is taxed in the next year (Assessment Year). For example, income from 2023-24 is taxed in 2024-25. After the new bill is passed, this system will change. The bill was sent to the Select Committee after being presented by Nirmala Sitharaman and its review report will be presented on the first day of the Monsoon Session of Parliament, starting July 21 and ending August 21, 2025.