Finance Minister Nirmala Sitharaman may present the new income tax bill in the Lok Sabha in 13 February. However, its draft copy of 622 pages and 298 sections has already been revealed. This new bill will replace the old Income Tax Act of 1961. Its main objective is to make the process of tax payment easier and transparent.
New Income Tax Bill 2025
At present, the Income Tax Act 1961 has been implemented in India. In which the number of legal disputes is increasing continuously. After this, by making changes in the existing Income Tax Act 1961, work has been done to make the process of tax payment easier and digital. So that taxpayers can get relief. Along with the announcement of Union Budget 2025 on February 1, the Finance Minister had announced the New Income Tax Bill 2025. Which will be introduced in Parliament on February 13.
622 Pages Instead Of 880
The new Income Tax Bill has been introduced in place of the first Income Tax Act 1961. The old law had a total of 880 pages. The new law has 622 pages. Most of the subsections have been abolished in it. The new law will be called the Income Tax Act, 2025.
Why Was The New Income Tax Bill made?
The aim of the new Income Tax Bill is to make the law simple and clear. About 3 lakh words have been reduced with this new bill. This will make the law more accessible and easy to understand. Also, it will help in ensuring better compliance and making the tax system transparent.
Special Changes In The New Income Tax Bill
More tax exemption on NPS and EPF
- Tax benefits/exemptions on investments in retirement funds and mutual funds.
- More tax benefits on insurance schemes.
Stricter penalties on tax evasion
- Prosecution against those who deliberately evade tax.
- More interest and penalty for saving tax by giving wrong information.
- Right to confiscate property and seize account for hiding income.
Exemption on political parties and agricultural income
- Income of political parties and electoral trusts will remain tax-free.
- Tax exemption on agricultural income with certain conditions.
- Tax benefits on religious trusts, institutions and donations.
No change for stock market investors
- 20% tax on short term capital gains will remain the same.
- No change in long term capital gains and other capital gains taxes.
The term Assessment Year abolished
- Now the entire financial year (April to March) will be called “Tax Year”.
- The tax process will be easier for taxpayers.
Tax on digital assets
- Now cryptocurrencies and other digital assets will be considered as ‘capital assets’ and will be taxed. This will bring more clarity about the tax system on digital assets.
When Will The New Bill Become A Law?
Finance Minister Nirmala Sitharaman has introduced it in the Lok Sabha, where it has also been passed. Now it will be sent to the parliamentary committee. After the recommendations of the committee, it will be presented again in the Parliament. After getting approval from the Parliament and the assent of the President, this new income tax law will come into force.
Conclusion
After the introduction of the new Income Tax Bill, the 60-year old Income Tax Act 1961 will be completely abolished. Its purpose is to remove the complexities of the current income tax law and make it easier for taxpayers. If you have any question regarding this post, then you can tell us by commenting in the comment box given below. Your feedback and suggestions are welcome as always. Thank you.
