New Income Tax Bill 2025 Introduces by Sitharaman in Lok Sabha

On August 11, 2025, Finance Minister Nirmala Sitharaman has presented the new Income Tax Bill 2025 in the Lok Sabha. This updated bill was brought forward by the government after the old draft of the bill was withdrawn last week. This article will discuss all the new changes, updates, and its impact on Indian taxpayers

What Led Government to Introduce a Fresh New Income Tax Bill 2025 ?

The Income Tax Act, 1961 of India is above sixty years old and considerably complicated. It contains more than 4,000 amendments and does not seem to be easy to interpret by ordinary individuals and smaller companies. The new Income Tax Bill 2025 aims to simplify, clarify, and update tax laws. The government seeks to minimize confusion and litigation, enabling taxpayers and businesses to pay taxes without difficulty. Read more recent articles like this at News.highzones.com

What Are the Key Changes in the new Income Tax Bill 2025?

The bill incorporates the recommendations of a special select committee of Parliament who reviewed the old draft and proposed more than 285 modifications thereof. The major highlights include:

• Simpler Language:  There is less legal language, fewer complex phrases and the law is about half the size the previous act.
• Clearer Sections: The latest version contains 536 sections on 16 schedules as compared to the previous ones that exceeded 800 sections.
• Tax Year Concept: This concept substitutes the two part process of tax period on the previous year and tax period on assessment year with concept of one single new idea of tax year. This simplifies the process of filing tax and prevents confusion.
• Simple Deductions: Things such as interest on home loan would be easier to deduct, and there exists a rational formula that would compute tax on the income of house property.
• Focus on Digital: The bill encourages digital filing and simple compliance by taxpayers.
• Fewer Disputes: They eliminated several contradictory and confusing sections to reduce court cases and controversies.
• Support for Small Taxpayers: The new regulations will aid to small business, start-ups and salaried individuals by straightening out deductions and definitions.

How does this affect the Tax Payers?

According to the government, the changes will ease the process of tax returns among salaried individuals, middle classes, and small firms. Read more recent articles like this at News.highzones.com

• The government revises slabs and rates, allowing more taxpayers to benefit. It increases the income required to get full tax exemptions to at least 12 lakhs from 7 lakhs, and raises the maximum rebate amount to 60,000 from 50,000.
• Their incomes above 12 lakhs will be subject to marginal relief resulting in more money in the hands of middle class families.
• It has made it easier to file, get refunds and be compliant, eliminating forms and having options of filing online.
• Authorities will strictly tax anonymous donations to charitable trusts, but they grant some exemptions to religious organizations

What Made the Old Bill to be withdrawn?

In the initial version, released in February 2025, there were typographical errors that required corrections depending on the comments of the Parliamentary committees. The government withdrew it to avoid confusion caused by different versions, and today we present this single updated bill.

FAQs

What’s Next?

The new income tax bill 2025 will now be debated and discussed in parliament. Analysts project it may make its way to be the most significant tax reform in India in decades. Provided it comes into law, it will overhaul the existing voluminous 1961 tax law and provide new regulations to all Indian taxpayers. Read more recent articles like this at News.highzones.com

Disclaimer:

This article only have the intention of providing information. Any facts, quotations, and events are according to publicly accessible information at the time of writing. I have tried to be objective in the reporting of facts and to be fair, but the analyses and interpretations are my own and are not official opinion of any organization or individuals referred. It is kind advice to all the readers to do additional research and confirm the claims using reliable sources.

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