Income Tax Bill 2025: Old wine in a new bottle with no significant changes, say tax experts

Finance Minister Nirmala Sitharaman presented the new Income Tax Bill in Parliament today. The objective of the new Bill is to eliminate redundant provisions and simplify the language of the Tax Law to make the Act more succinct and easier to comprehend.

Commenting on the Income Tax Bill 2025, Rohinton Sidhwa, Partner, Deloitte India, said, “The Income-tax Bill, 2025, tabled in Parliament today by the Finance Minister, seeks to revamp the existing Income-tax Act of 1961 by making the tax system more streamlined and user-friendly. It introduces several notable changes. One such significant change is the replacement of the term “Assessment Year” with “Tax Year.”

Proposed to come into effect from April 1, 2026, the new bill reduces the number of chapters and sections, while keeping the current tax rates and structure unchanged. Notable changes include reorganizing major tax exemptions into distinct schedules for better clarity.

“The bill also simplifies the tax framework by removing numerous provisos and explanations, incorporating them into new clauses. It introduces an ‘interpretation’ section to define key terms and reformulates many provisions into tables for improved readability. Additionally, provisions from the original Act are retained for continuity, and rule-making powers are delegated to the CBDT and Central Government to ensure effective implementation,” he added.

Industry experts said the Finance Minister at various stages has stated her intent of having a direct tax law that simplifies the tax system to enhance compliance, broadens the tax base to increase revenue, reduces litigation by clarifying provisions, and ensuring fair treatment of taxpayers.

“In its current form, however, income tax laws are heavily worded and hard for laypersons to understand, which has led to litigation and friction between taxpayers and the I-T Department. We hope the new law will alleviate these pains,” said Adhil Shetty, CEO, BankBazaar.com.

Tax experts said based on an initial review, the new Income Tax Bill does not seem to introduce any significant changes to the charging provisions, computation methods, or assessment procedures.

Also Read: Income Tax Bill 2025: How is the new tax law different from the old one?

“Several provisions within a section have been restructured into separate sections. Exempt income and the conditions for claiming exemptions are now summarized in a tabular format within a separate schedule for easier understanding. The term ‘digital’ is mentioned 47 times, highlighting the growing importance of digitalization in record-keeping and digital transactions (including crypto and other virtual digital assets),” said Lokesh Shah, Partner, IndusLaw.

CA Anand Bathiya, President, BCAS (Bombay Chartered Accountants’ Society), said, “On prima facie reading, the Bill seems to be a bunch-up and clean-up, old wine in new bottle exercise. The form gets simpler with no major changes to affect the substance. Being an attempt to revamp after 65 years, the expectation was of a contemporary novel code, including newer concepts like group taxation, carry-back of losses, etc. But it seems the wait will be longer.”

Balwant Jain, a tax and investment expert, also said that based on his cursory reading of the new Income Tax Bill, he feels it is merely a good job of editing on the existing Income Tax Act. “No changes of consequences have been proposed in the Bill. It is purely a Babu’s product,” he added.