The Cabinet has cleared the new income tax bill and the bill is to make the language of the direct tax more simpler and will not impose any tax burden on the individuals. The New Income Tax Bill 2025 which has been passed is to eliminate the long sentences and explanations. On 7 February 2025, the Cabinet Minister approved this bill and this has replaced the Income Tax of 1961 which has been for more than 6 decades. Now the new declaration has been the Direct Tax code and is to reduce the income tax structure. The bill aims to just change the tax laws and not the actual taxes which have to be paid.
New Income Tax Bill 2025
The Union Cabinet Minister on 7 February 2025 has released the new Income Tax Bill which is to be implemented now. The Income Tax has to be paid by the individuals who have been earning whether they are Government employees or the Private Sector Employees. The Income Taxes are being paid under 5 different sources which have the Salaries, House Property, Capital Gains, profit or gains of business or profession and from Other Sources. These have been the 5 different heads of the Income Tax and after adding all the incomes, the deductions from Section 80 C to 80 U will be applicable. The slab rates shall be applicable and will be as per the new budget which has been approved. Now the changes to the Income Tax have been approved and this shall be applicable for the tax year of 2025-26 which is the new financial year.
The new income tax bill shall be made applicable till the financial year 2026-27 and the changes have been introduced just to make the tax language much more simpler while there shall be no changes in the taxes. The bill has been to push the tax reforms and the Government has made very clear that the bill shall not make any changes to taxes and the new provisions could make changes to the offences by reducing the penalties. Now the changes which are to be introduced through the bills shall be checked through the given post and you need to know the correct Income Tax Bill reforms which are to be introduced.
Income Tax Bill 2025 In Short
- The Union Cabinet Minister Nirmala Sitharaman has announced the bill in 2025.
- On 7 February 2025, the new bill was introduced and the bill is to bring changes in the languages of the tax bills.
- The Government has made it very clear that no changes will be introduced in the taxes.
- The income tax bill is to streamline and reform the tax system.
Focus Of Income Tax Bill 2025
The Government has made it very clear that the bill will not bring any changes to the taxes and will focus on just making the languages of the tax laws simpler. This is just to ensure the ease of compliance for the taxpayers. There shall be several amendments which are to be introduced to the existing law and will also reduce the litigation. The provisions could also focus on reducing the penalties and offences and will make it more taxpayer friendly.
How Will New Tax Bill Impact You?
The simplified structure will lower the amount of the taxes for the middle income groups.
For the businessmens there shall be fewer hurdles and a clear tax code.
Expectations From New Bill
- The new bill is to Simplify Tax Structure and will reduce the length of the taxes by almost half and will make it more simpler to understand.
- There is no need to have a budget to get the tax relief and some provisions shall allow the Government to modify the limits of the deductions.
- The bill will focus more on digitalization as the paperless assessment system will be introduced and will reduce human intervention. This will also reduce corruption and will promote transparency.
- The taxpayer will not be subjected to scrutiny unless there is a proper case of non compliance.
FAQs On New Income Tax Bill 2025
The New Tax Bill was introduced on 7 February 2025 by the Union Cabinet Minister.
The primary focus is to change the tax laws by making it easier to understand.
The simplified structure will therefore reduce the taxes payments for the middle income groups.
No, there shall be no budget needed to get the relief with the introduction of the new tax bill.