Finance Minister Nirmala Sitharaman is set to introduce the much-anticipated Income-Tax Bill 2025 in the Lok Sabha on February 13. The proposed legislation aims to modernize India’s taxation framework by replacing the existing six-decade-old Income Tax Act of 1961 with a more streamlined and comprehensible structure.
A Move Towards Simplified Taxation
As per the parliamentary agenda for Thursday, Sitharaman will seek approval to introduce the Bill, which focuses on consolidating and amending taxation laws without altering existing tax rates or introducing new levies. The revamped law is expected to take effect from April 2026.
Tax experts highlight that the new Bill seeks to simplify complex tax provisions, enhance compliance, and remove outdated clauses that have contributed to litigation and confusion over the years.
Key Changes: Removal of Obsolete Provisions
One of the significant changes in the new Income-Tax Bill is the elimination of obsolete sections, including provisions related to the now-defunct Fringe Benefit Tax. The restructuring aims to make tax laws more transparent and easier for taxpayers to navigate.
Additionally, technical jargon such as “assessment year” and “previous year” will be replaced with a more straightforward term—”tax year”—which will uniformly define the 12-month period starting from April 1. This shift will remove ambiguity in tax calculations and align India’s system with global best practices.
Enhanced Readability and Clarity
The new legislation prioritizes clarity by eliminating complex legal phrasing, explanations, and provisos that often made the Income Tax Act difficult to interpret. The frequently used term “notwithstanding” has been replaced with “irrespective” to improve readability and reduce legal confusion.
With the introduction of this Bill, the government aims to create a more taxpayer-friendly system, reducing compliance burdens while maintaining the integrity of India’s tax structure. As the proposal heads for discussion in Parliament, all eyes will be on how this reform shapes the future of taxation in the country.
