New Income Tax Bill 2025: The Government of India is preparing to introduce the new Income Tax Bill 2025 to make the income tax system simple and effective. Finance Minister Nirmala Sitharaman announced this bill during the budget speech on February 1.
According to reports, it will be introduced in Parliament on February 13, 2025. The aim of this new bill is to make the income tax system more transparent and comfortable for taxpayers.
The new income tax bill will be implemented from April 1, 2026
The government approved this bill on 7 February 2025. This new law will replace the old Income Tax Act in force since 1961. The government aims to simplify and modernize the tax system. According to reports, this bill will come into force from April 1, 2026 and its official name will be “Income Tax Act, 2025”.
Key highlights of the new Income Tax Bill
Simplifying tax rules : The tax system will be made more simple and taxpayer-friendly. Old and complex tax provisions will be removed and easy and clear rules will be implemented.
New system for resolving tax disputes : Special provisions will be added to resolve tax related matters faster. A digital dispute resolution system will be implemented to save taxpayers from unnecessary legal complications.
New powers to CBDT: Earlier, the Income Tax Department had to seek Parliament’s approval to implement various tax schemes. But under the new bill, the Central Board of Direct Taxes (CBDT) has been empowered to independently launch tax schemes. This will reduce bureaucratic delays and make tax administration more effective.
Digital Tax Monitoring: A new digital tax monitoring system will be implemented. This will make tax compliance easier and keep an eye on fraud.
Tax exemptions and deductions in the new bill
Annual income up to Rs 12 lakh will be tax free.
Standard Deduction
- ₹75,000 in the new tax regime
- ₹50,000 in the old tax regime
