The goal here is to eliminate outdated and redundant provisions and make the law more straightforward.
New Income Tax Bill 2025 Simplifying Taxation for a Modern India latest news: New Delhi, February 13, 2025 – Brace yourselves, India! The Union Cabinet has just approved the new Income Tax Bill 2025, which is all set to replace the decades-old Income Tax Act of 1961. This revamped bill, which will be known as the Income Tax Act, 2025, aims to make the tax system simpler and more user-friendly. And it's all set to take effect from April 1, 2026.
Key Updates You Should Know
Mark Your Calendar: The new tax law will officially kick in on April 1, 2026. So, you've got some time to get familiar with the new rules.
Lean and Mean: One of the standout features of the new bill is its brevity. While the old act was a whopping half a million words long, the new bill trims it down to 2.56 lakh words—that's nearly 50% fewer words! This is all about making things simpler and more understandable.
What's New in the Bill?
Simplified Language: The tax jargon is getting a makeover. The terms "Previous Year" and "Assessment Year" are being replaced by "Tax Year" to make things clearer for everyone.
Reduced Sections: The new bill will have 536 sections spread over 23 chapters and 16 schedules. The goal here is to eliminate outdated and redundant provisions and make the law more straightforward.
Clarity and Transparency: The bill introduces clearer provisions aimed at reducing disputes and making the tax filing process smoother for everyone.
Expert Insights
Tax experts are buzzing about the new bill. Naveen Wadhwa, vice-president at Taxmann, is excited about the changes. He says, "The Income Tax Bill simplifies the structure, removes redundant provisions, and replaces complex explanations with clear sub-sections. It's a significant improvement while respecting the legacy of the old act."
CA Dr. Suresh Surana also highlights the benefits of the bill's reduced size. "Despite the significant reduction in the legislation's size, the essence has been retained," he notes.
What This Means for You: For taxpayers, this means a simpler and more transparent tax system. The new bill includes straightforward provisions for salaried individuals and other taxpayers, making the process of filing taxes and linking PAN-Aadhaar more user-friendly.
Next Steps: The bill will soon be tabled in Parliament for final approval. Once passed, it will become the Income Tax Act, 2025, and will be implemented from April 1, 2026. This gives everyone ample time to adapt to the new changes and ensure a smooth transition.
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