Today, FM Nirmala Sitharaman has come up with one of the most awaited announcements in recent times and that is the introduction of the new Income Tax Bill 2025. As the economy has progressed, the present Income Tax Act of 1961 undoubtedly needs modernization to fit into the current economic activities and business practices. This present Act was designed to target the challenges faced during the post-independence era. In recent times, after 78 years of independence, the economy has evolved a lot especially with digitalization coming into play. Now we pre-filled ITR forms for ITR return filing, and many such changes to facilitate income tax filing. Thus, this new Income Tax Bill 2025 is not only long-awaited but also crucial to the growth of the economy as well.
New Tax Bill Highlights
- The concept of “Tax Year” has been proposed in this bill which is 12 months starting from 1 April. This will replace the current concepts of “assessment year” and “previous year”.
- The income tax regime remains the same as announced in the budget on 1 February. There are no changes in the capital gain tax regime as well.
- The bill has proposed presumptive taxation for NRIs
- It has also announced new rules and regulations for handling commercial and professional earnings
- The bill has a revised structure for penalties and compliance
- It has also enhanced the General Anti-avoidance rules (GAAR)
- The bill also introduces a formula-driven method for the calculation of depreciation to eliminate the uncertainties about computational factors in taxation.
- The bill also introduces a “Charter for Taxpayers” which will help in establishing principles of treating taxpayers with honesty, and help them with appeal mechanisms, all these will help in timely decision-making, maintaining confidentiality, privacy protection, and more.
- Eliminates the word “notwithstanding” from the Act, and introduces “irrespective” instead for more clarity
- Introduces tables and formulas in place of wordy explanations
- Introduces specific provisions for capital gain calculations related to the market-linked debentures.
- Big overhaul announced for tonnage tax law in which in this bill the Inland vessels are included which were earlier out of the law’s purview. This will help the shipping industry and promote inland waterway transportation.
New Tax Regime
As mentioned, the income tax slabs and income tax rates have not been altered and kept as announced during the budget. So, here are the tax slabs –
| Income (Rs.) | Tax Rate (%) |
| 0-4,00,000 | 0 |
| 4,00,001-8,00,000 | 5 |
| 8,00,001-12,00,000 | 10 |
| 12,00,001-16,00,000 | 15 |
| 16,00,001-20,00,000 | 20 |
| 20,00,001-24,00,000 | 25 |
| 24,00,001 and above | 30 |
Wrapping up
The Income Tax Act is witnessing such an in-depth overhaul after years and this was necessary to fit into the new economic scenario and conditions. Simplifying the Act will only attract more people and help in more tax collection as many people shy away from the complexities of the Taxation system. This new income tax bill 2025 is expected to revolutionize the entire taxation system and benefit the taxpayers, and multiple businesses/ industries together.
Source: TheEconomicsTimes
______________________________________________________________________________________
Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.