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PremiumIncome Tax Bill News Highlights: The Union Cabinet has approved the new Income Tax Bill on Friday, February 7, potentially leading to its introduction in the Lok Sabha early next week. This bill is part of a larger effort to reform the tax system and aims to overhaul the existing tax structure to make it more streamlined and transparent.
The Union Budget 2025 announced that the Ministry of Finance will table the new Income Tax Bill in front of the Union Cabinet this week. Union Finance Minister Nirmala Sitharaman, in her annual press conference after the Budget, said that she hopes that the bill passes without any difficulties.
The Indian government aims to bring simplicity to the taxpayers with the new income tax bill and also announced that it will be 50 per cent less in text and clearer compared to the previous one.
The Union Cabinet, chaired by Prime Minister Narendra Modi, on February 7 approved new Income Tax bill, PTI reported citing sources. It will now be presented in the Parliament next week and would be sent to Parliament's Standing Committee on Finance, it added.
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Income Tax Bill News LIVE: The Union Cabinet cleared the new Income Tax Bill on Friday, February 7, reported the news agency PTI, citing people aware of the development. The bill is now set to be presented in front of the parliament next week.
Income Tax Bill News LIVE: The Union Cabinet cleared the new Income Tax Bill on Friday, February 7, reported the news agency PTI.
Income Tax Bill News LIVE: Union Finance Minister Nirmala Sitharaman, on February 1, announced that the Ministry of Finance has proposed to impose no income tax up to ₹12 lakh. The question arises of why tax slabs exist.
This happens because the tax payable gets nullified against the rebate offered up to ₹60,000. Beyond this rebate, the tax liability is payable.
Income Tax Bill News LIVE: The new income tax bill is set to come into effect from the financial year 2025-26, and effective from the assessment Year 2026-27, according to the budget announcement of February 1, 2025.
There are a number of provisions that require more clarity such as taxation of income of non-residents, payment for licensing of software, income of remote workers and gig workers, say experts.
Dipesh Jain, partner at Economic Laws Practice, a law firm, says that there are certain provisions such as payment of software licensing wherein different high courts have different interpretations, which calls for a law that is written on a clean slate.
Rajul Kothari, Partner, Capital League, echoes the need for simplification.
“The frequent and complicated tweaks to personal tax and capital gains tax provisions have created complexity and confusion. With multiple asset classes and product categories, the constant changes have made it challenging for taxpayers to navigate. Grandfathering existing investments, unless new rules are more beneficial, would provide much-needed confidence, predictability and remove uncertainty," he says.
"Over the years, things have become very complicated. Topics like Residential Status of a person, Capital Gain charged on different capital assets, Definition of property have become a complex subject. To simplify them, it is better to write them fresh with a new perspective and simplicity," says Prof Saumya Aggarwal, Assistant Professor, Shri Ram College of Commerce (SRCC), University of Delhi.
“Things have changed. The Act was written in 1961. Now, technology has changed overtime and so has the income level of people. Certain things have to be redefined. Concepts like taxation of virtual assets need more clarity and attention," she adds.
In the next 64 years, the Income Tax Act has undergone a flurry of changes almost every year. From tweaks in the tax rates to the introduction of new provisions; from bringing a new exemption to the scrapping of old ones – this Act has seen a lot in the past six decades and counting.
For a long time now, tax experts and taxpayers have felt the need for a new law which is written on a clean slate, subsuming all the current provisions and beyond.
The new income tax bill will carry forward the same spirit of Nyaya (Hindi word for justice) which was carried in Bharatiya Nyaya Sanhita that replaced the Indian Penal Code (1860 Act) in July 2024, Finance Minister Nirmala Sitharaman said during her Budget speech on February 1, 2025.
Central Board of Direct Taxes (CBDT) Chief Ravi Agrawal earlier this week encouraged industry players to give their suggestions on the new income tax bill, which will be tabled in Parliament this week.
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.
The Parliament's Budget session began on January 31. The first part of the session will continue until February 13, and the second session will restart on March 10 and continue until April 4.
As per the India Today report, the new Income Tax Bill may be presented in Lok Sabha on Monday, February 10, during the ongoing Budget session of the Parliament. However, there has not been any official confirmation of the date. Prime Minister Narendra Modi will reportedly chair the cabinet meeting on Friday evening to discuss the new Income Tax Bill.
According to another report by news agency ANI, the new Income Tax Bill was supposed to be introduced in Parliament on Thursday.
Union Finance Minister Nirmala Sitharaman, during her Union Budget 2025, announced that the Centre will bring the new income tax bill.
The new income tax act will seek to replace the Income Tax Act of 1961 and simplify terms and clauses. “New Income Tax Bill will be clear and direct," FM Sitharaman said on February 1.
The new income tax bill, which will replace the Income Tax Act, 1961, has been drafted within 6 months and efforts have been made to simplify the language to help taxpayers understand. Also, the new law has been made concise, removing old provisions thereby making it less bulky.
Finance Secretary Tuhin Kanta Pandey on February 6 told reporters that the new income tax law “would be simple".
"The new bill will not put any new taxes, or any new burden. We are also not changing policy in a big way. We do not want to create any unstable situation," Pandey said.
The new law would be simple. "Laws are not supposed to be meant for only legal professionals. It is for citizens to understand," he added.
Finance Secretary Tuhin Kanta Pandey on February 6 told reporters that the new income tax bill will be uncomplicated, compared to the existing law.
Speaking to reporters at a PHD Chambers event, Pandey said: “When you see next week a new income tax Bill, you will see a very different Bill. The way we write laws is undergoing a change… You will see very less of those long sentences you will not see probably the provision, explanations…"
The Union Budget 2025 announced that the Ministry of Finance will table the new Income Tax Bill in front of the Union Cabinet this week. Union Finance Minister Nirmala Sitharaman, in her annual press conference after the Budget, said that she hopes that the bill passes without any difficulties.
The Indian government aims to bring simplicity to the taxpayers with the new income tax bill and also announced that it will be 50% less in text and clearer compared to the previous one.
The Union Cabinet is expected to approve the new Income Tax Bill on Friday, February 7, potentially leading to its introduction in the Lok Sabha early next week. This bill is part of a larger effort to reform the tax system and aims to overhaul the existing tax structure to make it more streamlined and transparent.
Income Tax Bill News LIVE: Finance Secretary Tuhin Kanta Pandey, speaking at a PHD Chamber of Commerce and Industry event, said that the law is not only for legal professionals. The upcoming new Income Tax Bill aims to make it easy for taxpayers to understand.
“Laws are not supposed to be only meant for legal professionals. They are also meant for the citizens to understand," said Pandey.
Income Tax Bill News LIVE: Tuhin Kanta Pandey, the Finance Secretary of the Ministry of Finance in a PHD Chambers event said that the new income tax bill will not put any new taxes or any new burden to the people of the nation, reported the news portal Economic Times.
Income Tax Bill News LIVE: Finance Secretary Tuhin Kanta Pandey on Thursday, February 6 said that the new income tax bill is poised to announced the change of how the government writes laws.
“When you see next week a new income tax bill, you will see a very different Bill. The way we write laws is undergoing a change. You will see very less of those long sentences you will not see probably the provison, explanations," said the Secretary, cited the news portal The Economic Times.
Income Tax Bill News LIVE: An income tax exemption is provided on certain sources of income, not entirely on the total income. This means that, depending on the nature of the income, a part of it may remain non-taxable.
While calculating tax liability, exempt incomes are the first components that get reduced from your salary or other income. The tax exemption for income up to ₹4 lakh is zero, according to the Budget 2025 announcement.
Income Tax Bill News LIVE: According to the proposed revised new tax regime, people earning up to ₹12 lakh will pay no tax. Here is the breakdown:
1. For income up to ₹4 lakh, 0 tax is liable.
2. For income between ₹4 and ₹8 lakh, a 5% tax or up to ₹20,000 is charged.
3. For income between ₹8 lakh and ₹12 lakh, 10% tax or up to ₹40,000 is levied.
4. The total rebate under 87A is ₹60,000 according to Budget 2025. Therefore, the rebate cancels out the total estimated tax of ₹60,000 ( ₹40,000 + ₹20,000).
Income Tax Bill News LIVE: Tax rebate is a tax relief provided to individuals who earn up to a certain threshold. Taxpayers can claim this amount from total tax payable. Tax rebate reduces the total tax payable by deducting a fixed amount from the calculated tax liability.
The proposal for the revised new tax regime aims to cancel out the tax payable for taxpayers earning up to ₹12 lakh instead of a total tax exemption.
The maximum rebate available is ₹60,000, which is for a taxpayer with an income of ₹12 lakh, on which tax is payable as per the new slabs, Mint reported earlier.
Income Tax Bill News LIVE: In the Budget 2025 announcement, Finance Minister Nirmala Sitharaman said that people earning income up to ₹12 lakh under the new tax regime.
For salaried individuals, income up to ₹12.75 lakh will come under no income tax due to a standard deduction benefit of ₹75,000.
Income Tax Bill News LIVE: The proposed income tax rates under the new tax regime are as follows -
1) ₹0-4 lakh = Nil tax
2) ₹4-8 lakh = 5% rate
3) ₹8-12 lakh = 10% rate
4) ₹12-16 lakh = 15% rate
5) ₹16-20 lakh = 20% rate
6) ₹20-24 lakh = 25% rate
7) Above ₹24 lakh = 30% rate
However, the also announced that people with an income of up to ₹12 lakh will have to pay “Zero tax," according to the Budget 2025 announcement.
Income Tax Bill News LIVE: The new income tax bill is set to come into effect from the financial year 2025-26, and effective from the assessment Year 2026-27, according to the budget announcement of February 1, 2025.
Income Tax Bill News LIVE: Central Board of Direct Taxes (CBDT) Chairman Ravi Agarwal, in an interview with the news portal Business Today, said that after the implementation of the new tax regime proposed in the Budget 2025, around 95-97 per cent of the taxpayers would join the new tax regime.
“A straight computation of income tax is available in the new tax regime with reduced rates. About 74 per cent of the people have already adopted the new tax regime. I am sure that with this change that has been brought out in this amendment in the finance bill, more people would be prompted to join the NTR. We have about 8-8.5 crore individual taxpayers and out of that 75 per cent have already opted. So going forward I see the figure touching somewhere around 95-97%," said Agarwal, cited the news portal.
Income Tax Bill News LIVE: The gross corporate tax collection rose almost 17% year-on-year (YoY) to ₹9.71 lakh crore as of January 12, 2025, compared to ₹8.33 lakh crore as of the same period a year ago.
Income Tax Bill News LIVE: The gross direct tax collections under the non-corporate segment rose nearly 28% year-on-year (YoY) to ₹10.45 lakh crore as of January 1, 2025, compared to ₹8.58 lakh crore in the previous year, according to official Income Tax data
Non-Corporate Tax (NCT) includes taxes paid by individuals, HUFs, Firms, AoPs, BoIs, Local Authorities, Artificial Juridical Person.
Income Tax Bill News LIVE: The Income Tax Act of 1961 has been in existence for over the last 60 years and has 298 sections and 23 chapters. In the last six decades, the multiple additions and revisions have made the act complicated for the taxpayers.
Hence, the Modi 3.0 has finally decided to change the Income Tax Act with the new Income-tax bill, according to the Budget 2025 announcement.
Income Tax Bill News LIVE: The new income tax bill will seek to replace the outdated Income Tax Act of 1961 and simplify terms and clauses, according to Union Finance Minister Nirmala Sitharaman.
“New Income Tax bill will be clear and direct", said Sitharaman on February 1.
Income Tax Bill News LIVE: The Government of India expects the upcoming income tax bill which is set to be approved by the Union Cabinet on Friday, February 7 is expected to be simple to understand for taxpayers.
“It will be simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation," as per the Budget 2025 announcement.
Income Tax Bill News LIVE: The Indian government aims that the new income tax bill will be clearer and expected to have 50% less text, as per FM Nirmala Sitharaman's Budget 2025 announcement.
“The New Income Tax Bill will be clearer and will have around 50% lesser text compared to the present law, in terms of both chapters and words," according to the Union Budget announcement.
Income Tax Bill News LIVE: According to media reports, Union Cabinet is likely to approve the new Income Tax Bill on Friday and the bill is likely to be introduced next week.
