Wed Feb 12 23:04:54 UTC 2025: ## New Income Tax Bill Unveiled in India: Simplification and Enhanced Compliance

**Mumbai, India –** A comprehensive new Income Tax Bill, expected to be tabled Thursday, promises to streamline India’s tax system while bolstering compliance and transparency. The bill, totaling over 600 pages with 23 chapters, 536 clauses, and 16 schedules, replaces the current 298-section Act. While tax rates remain unchanged, significant structural reforms are introduced.

Key changes include the shift from “assessment year” and “financial year” to “tax year” and “previous year,” respectively. The bill simplifies deductions, consolidating salary-related deductions (standard deduction, gratuity, leave encashment, etc.) into a single chapter. It also introduces deductions for electric vehicle purchases and updates medical and education-related deductions. Furthermore, the Central Board of Direct Taxes (CBDT) gains enhanced powers to create schemes and rules, similar to the Goods and Services Tax (GST) system.

The bill significantly strengthens tax enforcement. Civil courts will be barred from interfering in tax matters. A dedicated clause addresses the taxation of earnings from various sources, including lotteries, online games, and virtual digital assets. Enhanced reporting mechanisms are implemented, mandating detailed reporting of crypto transactions, the issuance of Annual Information Statements (AIS) for greater transparency, and international tax reporting for cross-border transactions.

Tax expert Sandeep Jhunjhunwala of Nangia Andersen LLP highlights the bill’s comprehensiveness, noting the significant increase in clauses and schedules compared to the existing act. However, he points out that some provisions previously covered under the Income-tax Rules, 1962, such as revenue recognition and inventory valuation, are notably absent in the new bill.

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