New Delhi, February 13: Finance Minister Nirmala Sitharaman proposed the new Income Tax Bill 2025 in the Lok Sabha, aiming to substantially relieve the burden of litigation in India. Through this bill, the government intends to simplify tax compliance through the use of easier words and reducing ambiguity in the legal terms.
“Assessment year” and “previous year” have now been changed to “tax year,” vastly improving accessibility for average taxpayers. Balwant Jain, a tax and investment consultant based in Mumbai, pointed out how the proposed change can significantly lessen disputes which are expensive time sinks for taxpayers and the IRS.
The Opposition MPs had differing opinions regarding the overwhelming scope of Esther’s proposed legislation, with one being its 622 pages and 536 sections, along with 23 chapters and 16 schedules which do not consider adding any new taxes but rather attempt to ease the burden of dealing with189 sections on the 1961 Act of Income tax, 14 on the earlier schedule. Still, they brought up valid points regarding the growing number of portals competing against the pre-1961 Act did create issues.
NK Premachandran raised a valid point of concern regarding the vast amount of increase in the division of sections in the later parts of the bill. Sitharaman explained that the Legacy Act had grown due to amendments and is almost 819 sections lengthy.“From that 819, we’re bringing it down to 536,” she emphasized, adding that over 4,000 amendments had been made to the 1961 act since its inception.
TMC MP Professor Sougata Ray criticized the changes in the bill as “mechanical.” Defending the bill, Sitharaman stated that the modifications were substantial, not just cosmetic. “Some words have come down by half. Sections and chapters have been reduced. It is in plain simple English and plain simple Hindi,” she assured.
Sitharaman proposed that the Income Tax Bill 2025 will be sent to a newly constituted Select House Committee for further scrutiny. The terms and conditions of this committee will be decided by Lok Sabha Speaker Om Birla.
With the introduction of the Income Tax Bill 2025, the government aims to modernize India’s tax laws, making them more transparent and user-friendly while addressing long-standing ambiguities and complexities in the current system.
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