New Income Tax Bill Budget 2025: A new income tax legislation will be introduced by the government next week in the ongoing Budget session of Parliament, Union Finance Minister Nirmala Sitharaman said Saturday while presenting the Union Budget for 2025-26.
The proposed new income tax law follows from the earlier Budget announcement for 2024-25. In July 2024, Sitharaman had announced a comprehensive review of the Income-tax Act, 1961 to be completed in six months. The purpose of the review is to make the Act concise, lucid, and easy to read and understand. This, in turn, is expected to reduce disputes and litigation, thereby providing tax certainty to the taxpayers.
“It will also bring down the demand embroiled in litigation. It is proposed to be completed in six months,” she had said.
In October last year, the Income Tax department had announced the formation of an internal committee to review the Income-tax Act and invited public inputs and suggestions on four key areas — simplification of language, litigation reduction, compliance reduction, and obsolete provisions.
Before this, the government attempted to simplify the Income-tax Act several times. In 2018, a task force was formed to draft a new direct tax law that submitted its report in 2019.
Direct Taxes Code (DTC) was earlier proposed by the UPA I government, a draft Bill was put up in August 2009 and it was tabled in Parliament in 2010. The Bill, after review by the Standing Committee, was then revised twice, in 2012 and 2014, but lapsed with the dissolution of the 15th Lok Sabha.
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