Finance Minister Nirmala Sitharaman has introduced the Income Tax Bill 2025 in the Lok Sabha, marking a significant step toward simplifying India’s tax system. The new bill aims to make tax compliance easier for individuals and businesses by reducing complexity and improving clarity in tax laws. However, the bill’s introduction was met with chaos in Parliament, leading to a walkout by several Opposition MPs.
In this blog, we’ll break down the key features of the Income Tax Bill 2025, the Opposition’s objections, and what it means for taxpayers. Keep reading to stay informed about the latest updates on India’s tax reforms!
Key Features of the Income Tax Bill 2025
The Income Tax Bill 2025 is designed to simplify the existing tax framework and make it more user-friendly. Here are the major highlights:
- Reduced Number of Sections:
- The current Income Tax Act has 819 sections, which will be reduced to 536 sections in the new bill.
- This simplification aims to make the law more concise and easier to understand for taxpayers.
- Simplified Language:
- The bill uses plain and simple language in both English and Hindi, ensuring better clarity for taxpayers.
- The number of words in the legislation has been reduced by 50%, making it less intimidating for individuals and businesses.
- Addressing 4,000+ Amendments:
- Since its enactment in 1961, the Income Tax Act has undergone over 4,000 amendments, leading to a complex and cumbersome structure.
- The new bill consolidates these changes, offering a more streamlined and modern tax framework.
Opposition’s Objections and Walkout
The introduction of the Income Tax Bill 2025 was met with strong objections from the Opposition. Here’s what happened:
- NK Premachandran’s Concerns:
The MP from Kerala’s Kollam raised concerns about the increased number of sections in the new bill compared to the original 1961 Act, which had only 298 sections.- Sitharaman’s Response: She clarified that the current Act has 819 sections, and the new bill reduces this number to 536. She urged MPs to consider the current state of the law before criticizing the changes.
- TMC MP Sougata Ray’s Criticism:
Ray called the changes “mechanical” and questioned their effectiveness.- Sitharaman’s Reply: She emphasized that the changes are substantial and aimed at simplifying the language and structure of tax laws.
Amid the uproar, several Opposition MPs staged a walkout, though the exact number of MPs who left the session remains unclear.
What’s Next? Bill Sent to Select House Committee
Finance Minister Nirmala Sitharaman proposed that the Income Tax Bill 2025 be referred to a newly-constituted Select House Committee for further review.
- The committee’s terms and conditions will be decided by Speaker Om Birla.
- It is expected to submit its report on the first day of the next parliamentary session.
This step ensures that the bill undergoes thorough scrutiny before being implemented, addressing any concerns raised by stakeholders.
What Does the Income Tax Bill 2025 Mean for Taxpayers?
The Income Tax Bill 2025 is a significant move toward modernizing India’s tax system. Here’s how it could impact taxpayers:
- Easier Compliance: Simplified language and fewer sections will make it easier for individuals and businesses to understand and comply with tax laws.
- Reduced Complexity: By consolidating over 4,000 amendments, the bill aims to create a more streamlined and efficient tax framework.
- Improved Transparency: Clearer language and structure will reduce confusion and make the tax filing process more transparent.
Stay Updated with DigiFinTechEdu
The Income Tax Bill 2025 is a landmark reform that could transform India’s tax landscape. At DigiFinTechEdu, we’ll keep you updated on the latest developments, including the Select House Committee’s report and the bill’s progress in Parliament.
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Disclaimer:This blog is for informational purposes only and does not constitute legal or financial advice. For detailed guidance, consult a tax professional.