The Business Bytes
THEBUSINESSBYTES BUREAU
NEW DELHI, MARCH 25, 2025
The much-anticipated Income Tax Bill, 2025, aimed at replacing the six-decade-old Income Tax Act, 1961, will be taken up for discussion in the Monsoon session of Parliament, Finance Minister Nirmala Sitharaman announced in the Lok Sabha on Tuesday.
The proposed Bill seeks to simplify direct tax laws, eliminate ambiguities, and reduce tax disputes by making the law clearer and more structured. The Finance Ministry highlighted three core principles guiding the new Bill—textual and structural simplification, ensuring continuity and certainty with no major tax policy changes, and preserving predictability by maintaining existing tax rates.
Aimed at enhancing ease of doing business, the Bill follows global best practices to create a tax framework that is both simpler and clearer. One of the most notable changes is the drastic reduction in the size of the legislation, making it more user-friendly.
The total number of words has been cut nearly in half, from 512,535 words in the existing Act to 259,676 words in the new Bill, marking a reduction of 252,859 words.
The number of chapters has come down from 47 to 23, ensuring a more concise and navigable structure.
The number of sections has been reduced from 819 to 536, eliminating 283 redundant provisions.
This extensive revision has been achieved through language simplification, removal of redundant and repetitive provisions, and logical reorganization of sections for better readability and navigation. The structural rationalization includes the use of tables and formulae to improve clarity and usability while retaining core taxation principles.
To ensure inclusivity and practical relevance, the government conducted wide-ranging consultations with industry experts, tax professionals, and stakeholders. It also studied simplification models from Australia and the UK to adopt the best global practices.
A total of 20,976 online suggestions were received from taxpayers, businesses, industry associations, and professional bodies.
After careful evaluation, relevant suggestions were incorporated into the new Bill to enhance its effectiveness.
By addressing longstanding complexities and modernizing India’s tax framework, the Income Tax Bill, 2025, marks a significant step toward a more transparent, predictable, and business-friendly tax system. If passed, the Bill is expected to provide greater clarity and ease of compliance for both individuals and businesses, fostering a more efficient tax environment in the country.
