In a move aimed at simplifying India’s complex tax laws, Finance Minister Nirmala Sitharaman has introduced the Income Tax Bill, 2025 in the Lok Sabha. This new bill is designed to make it easier for taxpayers to navigate the system and reduce the complexity that has built up over the years.Sitharaman explained that the original Income Tax Act, enacted in 1961, had just 298 clauses. However, over time, many more clauses were added, increasing the complexity of the law. “We’re reducing income tax sections from 819 to 536,” she said. “We’re making major changes to the Income Tax Bill, shortening chapters and making it easier to understand.”So, what does this mean for taxpayers? The new bill aims to simplify the language and law, making it easier to understand. It will also consolidate reforms, streamlining the tax system and eliminating redundant provisions. Additionally, the bill seeks to preserve existing taxation principles, maintaining consistency in tax laws, and enhance usability, making tax compliance more convenient.Another significant change is the potential for lesser penalties for certain offenses. This could make the taxation system more taxpayer-friendly.It’s worth noting that there are no changes to the concession structure. Instead, the focus is on making six-decade-old laws more user-friendly.The government consulted with a lot of stakeholders to participate in thus, however many of them are not convinced yet. Congress MP Manish Tiwari criticized the legislation, stating it’s more complicated than the previous bill.The new law is expected to come into effect on April 1, 2026. While there may be some initial uncertainty, the Income Tax Bill, 2025, is a significant step towards modernizing India’s tax framework and making it more transparent and taxpayer-friendly.
By Anupriya Gaikwad
Reporting for True to Life News Media pvt. Ltd.