Wed Feb 12 18:04:59 UTC 2025: ## New Income Tax Bill Unveiled in India: Simplified Structure, Enhanced Compliance

**Mumbai, India** – India is set to introduce a comprehensive overhaul of its Income Tax Act, with a new bill expected to be tabled on Thursday. The bill, boasting 23 chapters, 536 clauses, and 16 schedules, aims to simplify the tax structure while enhancing compliance and transparency.

Unlike the current 298-section Act, the new bill streamlines various provisions. Key changes include replacing the existing “assessment year” and “financial year” with “tax year” and “previous year,” respectively. Deductions, previously scattered across the Act, have been consolidated. The bill also introduces deductions for electric vehicle purchases and updates provisions related to medical and education expenses.

The Central Board of Direct Taxes (CBDT) will gain greater authority to formulate schemes and rules, mirroring the structure of the Goods and Services Tax (GST). Importantly, the bill restricts civil court interference in tax matters, strengthening the tax administration’s authority.

The new legislation explicitly addresses taxation of earnings from various sources, including lotteries, online games, and virtual digital assets. Furthermore, it strengthens compliance mechanisms, mandating detailed reporting of crypto transactions and the issuance of Annual Information Statements (AIS) for improved transparency. International tax reporting for cross-border transactions is also enforced.

While the bill maintains existing tax rates for income and capital gains, tax experts note its increased complexity. Sandeep Jhunjhunwala of Nangia Andersen LLP highlighted the bill’s significant size and the removal of explanations and provisos from the new version. He also noted some existing provisions, such as those concerning revenue recognition and inventory valuation, were not included in the new bill. The new act is expected to be over 600 pages long.

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