Key Points
- The Lok Sabha Select Committee is inviting public, expert, and industry feedback on the draft Income Tax Bill 2025, aiming to overhaul and simplify India’s tax laws.
- Suggestions can be submitted in Hindi or English to the Lok Sabha Secretariat within 14 days; an online portal is also available for feedback.
- The bill seeks to replace the Income Tax Act of 1961, focusing on transparency, reduced litigation, and ease of compliance for individuals, businesses, and non-profits.
- Major reforms include streamlined tax slabs, higher exemption limits, rationalized TDS/TCS provisions, and a new “tax year” system.
- The new law, if passed, will take effect from April 1, 2026.
New Delhi: The Lok Sabha Select Committee, chaired by BJP MP Baijayant Jai Panda, has called for suggestions from the public, tax experts, industry bodies, and stakeholders on the draft Income Tax Bill 2025. This move is part of a comprehensive effort to overhaul India’s outdated tax system and make it more transparent, predictable, and business-friendly. Interested parties have 14 days to send their feedback in Hindi or English to the Lok Sabha Secretariat (Room No. 133A, Parliament House Annexe, New Delhi) or via the Income Tax Department’s e-filing portal, which features a dedicated feedback utility for this purpose.
Why the New Income Tax Bill 2025?
The Income Tax Bill 2025, introduced in Parliament by Finance Minister Nirmala Sitharaman on February 13, seeks to repeal and replace the Income Tax Act of 1961 a law that has seen over 4,000 amendments and become increasingly complex over the decades. The new bill is designed to:
- Simplify tax compliance and procedures for taxpayers and authorities.
- Reduce legal disputes and provide greater certainty in tax matters.
- Enhance transparency and ease of doing business.
- Align India’s tax system with global best practices.
Major Reforms and Features
1. Simplified Structure and Language
- The bill reduces the word count by nearly half, removes redundant provisions, and uses tables for clarity.
- Key terms like “assessment year” are replaced with “tax year” for easier understanding.
2. Streamlined Tax Slabs and Higher Exemptions
- Revised tax slabs under the new regime: No tax up to ₹4 lakh, 5% up to ₹8 lakh, 10% up to ₹12 lakh, and so on, with a maximum rate of 30% above ₹24 lakh.
- Individuals earning up to ₹12 lakh (₹12.75 lakh for salaried with standard deduction) pay no income tax due to an enhanced rebate under Section 87A.
3. Focus on Reducing Litigation
- The bill aims to minimize disputes by clarifying ambiguous provisions and consolidating rules for non-profits and other entities.
4. Modern Compliance and Technology Integration
- Emphasis on digital filing, simplified forms, and a trust-based system (“Trust First, Scrutinise Later”).
- Introduction of a unified “tax year” for simpler compliance, especially for new businesses.
5. Broader Tax Base and Rationalized TDS/TCS
- Expands the tax net to include more of the informal sector and raises exemption limits for lower-income groups.
- Rationalizes TDS/TCS rules to reduce compliance burdens.
6. Special Provisions for Non-Profits and Startups
- Consolidates rules for non-profit organizations, making compliance easier.
- Startups incorporated before April 1, 2030, get 100% profit deduction for three out of ten years.
Who Will Be Impacted?
The new bill will affect all categories of taxpayers individuals, businesses, and non-profits by making the tax structure more straightforward and dispute-free. The government expects the law to provide stability to India’s revenue system, boost industry, and offer substantial relief to honest taxpayers.
How to Submit Suggestions
- Deadline: 14 days from the announcement.
- Where: Lok Sabha Secretariat, Room No. 133A, Parliament House Annexe, or online at the Income Tax Department’s e-filing portal.
- What to Include: Reference specific sections, rules, or forms for precise feedback.
What’s Next?
After collecting suggestions, the Select Committee will review and incorporate relevant feedback before submitting its report in the upcoming Monsoon session. If enacted, the new Income Tax Bill will come into force from April 1, 2026.
The Income Tax Bill 2025 marks a historic step in India’s journey toward a fair, transparent, and modern tax regime. Stakeholder participation is crucial submit your suggestions now to help shape the future of India’s tax system.
