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The new income tax bill, which will replace the six decade old Income Tax act, 1961, has been drafted within six months and efforts have been made to simplify the language to make tax compliance easier for taxpayers.
New Income Tax Bill.
The Union Cabinet, chaired by Prime Minister Narendra Modi, on Friday approved the Income Tax Bill which would likely eliminate the need to wait for the budget for some kind of income tax reliefs or amend the Income Tax Act.
The new income tax bill, which will replace the six decade old Income Tax act, 1961, has been drafted within six months and efforts have been made to simplify the language to make tax compliance easier for taxpayers and make it easier to read and understand.
Read More: New Income Tax Bill May Eliminate Need For Budget For Tax Reliefs: Report
According to the government sources, the bill will help the taxpayer to avoid a lot of litigation matters.
After Cabinet approval, the bill is expected to be tabled in the Lok Sabha, most likely on Monday and could be referred to the Parliamentary Standing Committee on Finance for wider consultation.
Finance Minister Nirmala Sitharaman while presenting the Union Budget 2025-26 last week had said the government will introduce the new income tax bill in Parliament next week.
What’s The Need Of New Bill?
The new legislation, also known as the Direct Tax Code, is aimed at revamp the existing income tax structure to simplify the provisions. It will replace the existing Income Tax Act, 1961.
Sitharaman said the bill would embody the same philosophy of Nyaya that was at the heart of Bharatiya Nyaya Sanhita. The law had repealed the Indian Penal Code of 1860 from July 2024.
In the Budget Speech 2025, Sitharaman said, “I am happy to inform this August House and the country that the new income-tax bill will carry forward the same spirit of “Nyaya”. The new bill will be clear and direct in text with close to half of the present law, in terms of both chapters and words. It will be simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation.”
What’s Expected In New Bill?
The bill is expected to bring in simplified residence rule, which could give more clarity to determine the residential status of a taxpayer.
It will simplify the overall tax structure by reducing complexity.
It is also expected to make the compliance of the income tax law easier for taxpayers and income tax authorities.
