New Income Tax Bill introduced in Lok Sabha

Union Finance Minister Nirmala Sitharaman during the Budget session of Parliament, in New Delhi, on February 13, 2025.
| Photo Credit: PTI

Finance Minister Sitharaman on Thursday (February 13, 2025) introduced the Income Tax Bill, 2025, in Lok Sabha amid Opposition parties objecting its introduction. While moving the Bill for introduction, she urged Speaker Om Birla to refer Income Tax Bill, 2025, to Select Committee of Lok Sabha.

Opposition members opposed the Bill at the introduction stage but the House passed a motion by voice vote for its introduction.

The Lower House was adjourned to meet on March 10 for second half of Budget session.

Also read | New Income Tax Bill to have 622 pages, 536 sections

She urged the Speaker to take a call on the proposed panel’s composition and rules.

The much-anticipated Bill will replace terminologies such as “assessment year” and “previous year” with the easier-to understand “tax year” as part of a move to simplify language while removing provisos and explanations.

The Bill once enacted will replace six-decade old Income Tax Act 1961, which over the years became bulkier and complex with amendments.

The proposed law replaces the term ‘previous year’ as mentioned in the Income Tax Act, 1961 with ‘tax year’. Also, the concept of assessment year has been done away with.

Currently, for income earned in the previous year (say 2023-24), tax is paid in assessment year (say 2024-25). This previous year and assessment year concept has been removed and only tax year under the simplified bill has been brought in.

The Income Tax Bill, 2025 comprises 536 sections, higher than 298 sections of the current Income-Tax Act, 1961. The existing law has 14 schedules which will increase to 16 in the new legislation.

(With inputs from PTI)