A section of the media recently claimed that under the Income Tax Bill 2025, changes are proposed in the rates of Long Term Capital Gain (LTCG) tax on certain categories of taxpayers. Based on this claim, many reports and social media posts came to the fore, which said that through the new law, the existing tax exemption on equity investments can be abolished or the tax rates can be changed.
But now the Income Tax Department itself has put an end to all these speculations. The department has clearly stated in its official social media post that the purpose of the Income Tax Bill 2025 is only to simplify the language and remove old and irrelevant provisions.
No change in tax rates is proposed in this. The department also said that if any ambiguity remains, it will be removed while passing the bill.
All you need to know about new Income Tax Bill, 2025
It is worth noting that this new Income Tax Bill was introduced in the Lok Sabha during the budget session in February this year. After this, it was sent to a select committee of the Lok Sabha, which has recently presented its report. This bill proposes to replace the existing Income Tax Act, 1961, the basic objective of which is to make the tax law more intuitive, modern and technology-friendly. This is the first such attempt in which the tax law has been completely rewritten.
The new bill seeks to remove provisions that have become irrelevant over the years or have no use in today’s tax system. According to reports from reputed media organizations like Financial Express, Economic Times and Business Standard, no changes have been made to the existing system of tax slabs, tax rates or exemptions under this bill. Instead, the focus has been on simplifying the language of the law for taxpayers so that they can understand it even without the help of an expert.
However, a major reason for the confusion in the media was that some reports presented the changes related to section 112A in the bill assuming that the government is going to interfere in the LTCG tax rate. In fact, in the new draft bill, the language of many sections of the old Act has been changed or they have been restructured in a new way. Some media reports took this change as if possibly tax exemptions are being abolished or tax rates are being increased.
What does Lok Sabha Select Committee suggest on LTCG tax rate or slabs?
The recent report of the Lok Sabha Select Committee also does not mention any such recommendation that there should be a change in the LTCG tax rate or slabs. Instead, the committee has suggested that the language of the bill should be made available in regional languages, so that more and more taxpayers can take advantage of it. The committee has also emphasized on clarity of those points on which there may be scope for confusion.
The clarity of the Income Tax Department in this entire matter is relieving. The department has clearly stated that the bill does not make any change in the tax rates. Whenever the government wants to change tax rates, it is usually done through the Budget or Finance Bill — with transparency and after a discussion in Parliament. In such a situation, relying on such news without any official confirmation not only confuses but also puts taxpayers under unnecessary anxiety.
Filing your tax return this year? Head to our detailed ITR Guide for everything you need to know.