Thu Feb 13 09:05:27 UTC 2025: ## New Income Tax Bill Introduced in Indian Parliament

**New Delhi, February 13, 2025** – Union Finance Minister Nirmala Sitharaman today introduced the highly anticipated Income Tax Bill, 2025, in the Lok Sabha. The 622-page bill aims to replace the 60-year-old Income Tax Act of 1961, streamlining India’s tax system and taking effect in April 2026.

The bill, approved by the Cabinet on February 7th, includes significant changes aimed at simplifying tax procedures and reducing litigation. Key features include:

* **Simplified Language and Structure:** The bill boasts a significantly reduced number of sections (from approximately 931 to 536) and a clearer, more concise structure, using formulas instead of complex definitions for concepts like capital gains. The archaic terms “assessment year” and “previous year” have been replaced with “tax year.”
* **Increased Tax Exemption Limit:** A major relief for the middle class, the nil tax limit has been raised to ₹12.75 lakh per annum for salaried individuals (including a standard deduction of ₹75,000).
* **Choice of Tax Regimes:** Taxpayers can choose between the new and old tax regimes. The new regime offers lower tax rates but fewer deductions, while the old regime retains more deductions and exemptions. A comparative analysis is recommended for optimal choice.
* **Public Input:** Over 6,500 suggestions from stakeholders were considered during the bill’s development.

Following its passage in the Lok Sabha, the bill will be sent to the Parliamentary Standing Committee on Finance for review and consultation before returning to Parliament for final approval. While some, like Congress MP Manish Tewari, have criticized the bill’s complexity, BJP MP Tejasvi Surya praised the government for modernizing the tax system. Experts anticipate the bill will reduce tax-related disputes and enhance compliance. The government has emphasized the “trust first, scrutinize later” approach in tax administration.

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