A new Income Tax Bill will be introduced in Parliament this week, which will replace the existing Income Tax Act of 1961. The new tax law is being brought to make the tax process simple and clear.

Union Finance Minister Nirmala Sitharaman made many important announcements while presenting the budget on February 1. The most important announcement among these was related to new income tax laws.

New bill will be introduced in Parliament this week

Sitharaman announced in her budget 2025 speech that the new Income Tax Bill will be introduced in Parliament “next” week. The Union Budget was presented on Saturday, February 1. This bill will replace the old law after almost 60 years.

Emphasis on simplicity and digital process in the new law

The new income tax law will be in simple language, which will make it easier for taxpayers to understand, as reports suggest. Along with this, digital process will be promoted, which will make tax filing completely digital. This can also reduce legal disputes. Apart from this, consideration can be given to combining assessment year and financial year to make a tax year.

Also read: Key changes in budget 2025 apart from tax-free 12 lakh income- Full details here

Key changes expected in the New Tax Bill:

The government said that the new law will replace the 63-year-old Income Tax Act, 1961, and changes in it will be made based on the feedback of taxpayers. The new tax regime was announced in 2020 under the 1961 law. The current law is in force from 1 April 1962.

Income Tax Bill: What is special?

Central Board of Direct Taxes (CBDT) Chairman Ravi Agarwal said that the government is trying to bring people into the new tax regime. Currently, about 75% of taxpayers are part of the new regime. After the income tax exemption, 95-97% of taxpayers will be included in the new regime. He says that filing tax returns will now be easier.

Agrawal has asked industry players to give their suggestions on the new Bill. The new Bill 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.

Agrawal said that the new bill has been drafted in such a way that it meets international standards. Also, the new law has been made concise, as old provisions have been removed, making it less bulky.

He asked the industry to give their suggestions once the new bill is introduced and assured them that the suggestions would be looked into.

With regard to updated I-T returns (ITR-U), Agrawal said in the last three years about 90 lakh such returns were filed. Around Rs 8,500 crore additional revenues were garnered.

Steps moving in a new direction

The new bill, however, is completely new and has been rewritten. There will be no change in tax rates in this bill. The finance ministry officials said that the aim of this new budget is to promote growth, without creating inflation problems.