New income tax Bill to be introduced in Parliament next week, says Nirmala Sitharaman
The proposed new income tax law follows from the earlier Budget announcement for 2024-25. In July 2024, Sitharaman had announced a comprehensive review of the Income-tax Act, 1961 to be completed in six months.
New Income Tax Bill Budget 2025: A new income tax legislation will be introduced by the government next week in the ongoing Budget session of the Parliament, Union Finance Minister Nirmala Sitharaman said while presenting the Union Budget for 2025-26.
“Our government had earlier ushered in Bharatiya Nyaya Sanhita replacing Bharatiya Danda Sanhita. 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,” the Finance Minister said.
The proposed new income tax law follows from the earlier Budget announcement for 2024-25. In July 2024, Sitharaman had announced a comprehensive review of the Income-tax Act, 1961 to be completed in six months.
The Finance Minister said that as other bills, it will go to the standing committee and after consultation with the stakeholders, it will come back. “If necessary, any more amendments if need to be brought in, we’ll bring it in and take it forward in the House,” she said.
As part of her FY26 Budget speech, Sitharaman also said the government has implemented several reforms for convenience of taxpayers over the last 10 years such as faceless assessment, taxpayers charter, faster returns, almost 99 per cent returns being on self assessment, and Vivad se Vishwas scheme. “Continuing these efforts, I reaffirm the commitment of the tax department to “trust first, scrutinize later”. I also propose to introduce the new income-tax bill next week,” she said.
In July, the Finance Minister had said that the purpose of the review is to make the Act concise, lucid, easy to read and understand. This, in turn, is expected to reduce disputes and litigation, thereby providing tax certainty to the taxpayers. “It will also bring down the demand embroiled in litigation. It is proposed to be completed in six months,” she had said.
In October last year, the Income Tax department had announced the formation of an internal committee to review the Income-tax Act and invited public inputs and suggestions on four key areas — simplification of language, litigation reduction, compliance reduction, and obsolete provisions.
Before this, the government has attempted to simplify the Income-tax Act several times. In 2018, a task force was formed to draft a new direct tax law that submitted its report in 2019.
Direct Taxes Code (DTC) was earlier proposed by the UPA I government, a draft Bill was put up in August 2009 and it was tabled in Parliament in 2010. The Bill, after review by the Standing Committee, was then revised twice, in 2012 and 2014, but lapsed with the dissolution of the 15th Lok Sabha.
New Income Tax Bill Budget 2025: A new income tax legislation will be introduced by the government next week in the ongoing Budget session of the Parliament, Union Finance Minister Nirmala Sitharaman said while presenting the Union Budget for 2025-26.
“Our government had earlier ushered in Bharatiya Nyaya Sanhita replacing Bharatiya Danda Sanhita. 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,” the Finance Minister said.
The proposed new income tax law follows from the earlier Budget announcement for 2024-25. In July 2024, Sitharaman had announced a comprehensive review of the Income-tax Act, 1961 to be completed in six months.
The Finance Minister said that as other bills, it will go to the standing committee and after consultation with the stakeholders, it will come back. “If necessary, any more amendments if need to be brought in, we’ll bring it in and take it forward in the House,” she said.
As part of her FY26 Budget speech, Sitharaman also said the government has implemented several reforms for convenience of taxpayers over the last 10 years such as faceless assessment, taxpayers charter, faster returns, almost 99 per cent returns being on self assessment, and Vivad se Vishwas scheme. “Continuing these efforts, I reaffirm the commitment of the tax department to “trust first, scrutinize later”. I also propose to introduce the new income-tax bill next week,” she said.
In July, the Finance Minister had said that the purpose of the review is to make the Act concise, lucid, easy to read and understand. This, in turn, is expected to reduce disputes and litigation, thereby providing tax certainty to the taxpayers. “It will also bring down the demand embroiled in litigation. It is proposed to be completed in six months,” she had said.
In October last year, the Income Tax department had announced the formation of an internal committee to review the Income-tax Act and invited public inputs and suggestions on four key areas — simplification of language, litigation reduction, compliance reduction, and obsolete provisions.
Before this, the government has attempted to simplify the Income-tax Act several times. In 2018, a task force was formed to draft a new direct tax law that submitted its report in 2019.
Direct Taxes Code (DTC) was earlier proposed by the UPA I government, a draft Bill was put up in August 2009 and it was tabled in Parliament in 2010. The Bill, after review by the Standing Committee, was then revised twice, in 2012 and 2014, but lapsed with the dissolution of the 15th Lok Sabha.
