Thu Feb 13 07:50:12 UTC 2025: ## Landmark Income Tax Bill Set for Parliamentary Debate

**New Delhi, [Date]** – A sweeping new Income Tax Bill is poised to be introduced in Parliament today, promising a significant overhaul of India’s tax system. If passed, the bill will replace the existing, cumbersome Income Tax Act of 1961, taking effect April 1, 2026.

The primary goal, according to government sources and tax experts, is simplification. The current 1,647-page Act, encompassing 52 chapters, will be condensed to a more manageable 622 pages across 23 chapters. This streamlining aims to reduce ambiguity and the number of tax disputes.

While tax experts like Munjal Almoula, Head of Tax at BDO India, and Rohinton Sidhwa, Partner at Deloitte India, assure that the bill will not impose new taxes or alter existing tax rates, key changes include the introduction of a unified “Tax Year” replacing the existing “assessment year” and “financial year” system. This will clarify the tax calculation period, particularly beneficial for businesses commencing operations mid-year. The definition of residency status for tax purposes remains unchanged.

The proposed new tax regime includes the following slabs:

* Up to Rs 4,00,000: No tax
* Rs 4,00,001 to Rs 8,00,000: 5%
* Rs 8,00,001 to Rs 12,00,000: 10%
* Rs 12,00,001 to Rs 16,00,000: 15%
* Rs 16,00,001 to Rs 20,00,000: 20%
* Rs 20,00,001 to Rs 24,00,000: 25%
* Above Rs 24,00,000: 30%

Budget 2025-26 also includes a tax rebate for individuals earning up to Rs 12 lakh annually. The five main categories for income classification remain the same. The bill does, however, propose adjustments to deductions for salaried individuals, including changes to standard deduction, employment tax, and gratuity deductions. Importantly, there are no changes to ITR filing deadlines, tax slabs, or capital gains tax rules. The bill’s passage is expected to bring much-needed clarity and efficiency to India’s tax landscape.

Read More