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The new Income Tax bill, known as the ‘Income Tax Bill 2025’, includes 600 pages, 23 chapters, 16 schedules and 536 clauses (to become a section after passing the bill).
The new income tax bill proposes to replace the ‘evaluation year’ and ‘last year’ with only one word ‘tax year’.
The new income tax bill known as ‘Income Tax Bill 2025’ is proposed to be implemented from April 1, 2026. The bill consists of 600 pages, 23 chapters, 16 schedules and 536 clauses (per according to sources to form the section after the bill).
Sources said that the bill proposes to replace the ‘evaluation year’ and ‘last year’ with only one word ‘tax year’. The tax year will define the 12 -month financial duration starting from April 1, 2026.
Importantly, there is no change in short -term capital gains (STCG) tax duration and rate. According to sources, STCG tenure remains at the rate of 12 months and 20 percent.
The current Income Tax Act, 1961 has a total of 298 sections. Sources said that it has been extended to 536 sections in the latest IT bill for better clarity in language.
According to the proposed law, the treatment has been included for disputes by reducing treatment by clarifying on stock options (ESOPs) and the judicial announcements of the previous 60 years have been included for more clarity.
According to the news agency, Rajat Mohan, senior partner of AMRG & Associates PTISaid, “This increase in classes shows a more structured approach to administration, including modern compliance mechanisms, digital regime and streamlined provisions for businesses and individuals. The new law introduces 16 schedule and 23 chapters. ,
Currently there will be 16 schedules in the new law compared to 14 schedules.
However, the number of chapters has been retained at 23. The number of pages has been significantly reduced by 622, with about half of the current voluntary act which includes amendments made in the last six decades. When the Income Tax Act, 1961 was brought, it had 880 pages.
“A major departure from the Income Tax Act, 1961 is that earlier, the Income Tax Department had to contact Parliament for various procedural matters, tax plans and compliance structure. Now, CBDT has been empowered to introduce such schemes independently, which is reducing the delay in bureaucracy and making tax more dynamic, “he said.
According to the new law, CBDT can now frame tax administration rules, introduce compliance measures, and according to Claus 533, can implement the monitoring system by digital without the need for continuous legislative amendments.
Importantly, this is the sixth income tax bill in India. The new bill will replace the current Income Tax Act, 1961. Sources said that after the bill is passed, it would be called ‘Income Tax Act, 2025’.
The bill is likely to be introduced in Parliament on Thursday.
After introduction in Parliament, the bill will be sent to the Standing Committee. The committee will conduct consultation on the bill and may also recommend a change in it.
Why a new income tax bill?
The current Income Tax Act, 1961 has made several amendments in decades, making it complicated and difficult for taxpayers. New Income Tax Bill is intended:
– Simple tax provisions with clear language
– Reduce legal disputes by removing ambiguity
– Make compliance easier for individuals and businesses
-Promote a trust-based tax system, where later investigation comes.
During his budget speech 2025, Finance Minister Nirmala Sitarman said that the bill would embrace the same philosophy of the judicial which was at the center of the Indian Justice. The law had canceled the Indian Penal Code of July 2024 to 1860.
In the budget speech, he said, “I am happy to inform this August House and the country that the new income tax bill will pursue the same spirit of” judge “. The new bill will be clear and directly in the text. The current law In half part of both, in the context of both chapters and words.
