Thu Feb 13 11:34:56 UTC 2025: ## New Income Tax Bill Introduced in Lok Sabha, Aims for Transparency and Simplicity
**New Delhi** – The Indian government introduced the New Income Tax Bill 2025 in the Lok Sabha today. Finance Minister Nirmala Sitharaman presented the bill and recommended its referral to a select committee. Lok Sabha Speaker Om Birla will soon announce the committee members. The committee is expected to submit its report during the monsoon session.
The bill, a significant overhaul of the Income Tax Act of 1961, aims to create a more transparent and taxpayer-friendly system. Key features include digitization, improved tax payment processes, and stricter measures against tax evasion.
**Key Changes in the New Bill:**
* **Simplified Structure:** The new bill has been significantly streamlined, reducing the page count from 880 in the 1961 Act to 622. It comprises 536 sections and 23 chapters.
* **Introduction of “Tax Year”:** The bill introduces the concept of a “Tax Year” (e.g., 2025-26 for April 1, 2025, to March 31, 2026), replacing the previous assessment year and previous year system to clarify the tax filing period.
* **Standard Deduction:** A standard deduction of ₹50,000 remains under the old regime, while the new regime offers ₹75,000. Tax slabs and rates remain as announced in the budget. Income up to ₹4 lakh remains tax-free.
* **Enhanced CBDT Powers:** The Central Board of Direct Taxes (CBDT) is granted greater autonomy to launch new tax schemes without needing parliamentary approval, aiming to reduce bureaucratic delays.
* **Capital Gains Tax Rates Unchanged:** Short-term capital gains tax remains at 20%, and long-term capital gains tax at 12.5%.
* **Tax Exemptions Retained:** Exemptions for pension, NPS contributions, insurance, retirement funds, gratuity, and PF contributions remain.
* **Increased Penalties for Tax Evasion:** The bill introduces stricter penalties and potential legal action for intentional tax evasion, including account seizure for concealing income.
* **Mandatory E-KYC and Digital Payments:** The bill promotes digitalization through mandatory e-KYC and online tax payments to increase transparency.
* **Agricultural Income Tax Exempt:** Agricultural income remains tax-free under certain conditions.
* **Reduced Tax Disputes:** The clearer language and simplified structure of the bill aim to reduce ambiguities and minimize tax disputes.
The bill represents a major step towards modernizing India’s tax system and enhancing its efficiency and transparency. Further details are expected after the select committee’s review.
First Piper 