FM Sitharaman to introduce Income-Tax Bill 2025 in Lok Sabha
Union Finance Minister Nirmala Sitharaman will introduce the Income Tax Bill 2025 in Lok Sabha today. The bill aims to simplify tax laws and consolidate provisions from the Income Tax Act, 1961.
Key Changes in the Bill
The bill introduces clearer language, replacing ‘Assessment Year’ with ‘Tax Year’ and ‘Previous Year’ with ‘Financial Year.’ It does not impose new taxes but organizes existing tax provisions into 536 sections, 23 chapters, and 16 schedules across 622 pages. In contrast, the 1961 Act had 298 sections and 14 schedules.
The new law will take effect from April 1, 2026, after notification. It retains both the old and new tax regimes for individuals, Hindu Undivided Families (HUFs), and others. Instead of complex explanations, the bill uses tables and formulas for clarity.
Major Provisions for Taxpayers
The bill introduces a Taxpayers’ Charter outlining rights and obligations. It also includes a special provision for calculating capital gains on market-linked debentures. Income not forming part of total income has been moved to schedules for easier reference.
For salaried individuals opting for the new tax regime, the standard deduction is ₹75,000. Additionally, employer contributions to the National Pension Scheme (NPS) up to 14% of salary qualify for deductions.
By consolidating and streamlining tax laws, the bill aims to make tax compliance easier and more transparent.
