Income Tax Bill: The New Income Tax Bill will be presented in Lok Sabha today; All amendments suggested by the Select Committee will be included

Finance Minister Nirmala Sitharaman will introduce the new Income Tax Bill approved by the Select Committee in the Lok Sabha on Monday. Parliamentary Affairs Minister Kiren Rijiju said that the new bill will incorporate all the 285 amendments suggested by the Select Committee. The Select Committee, headed by BJP MP Baijayant Panda, had approved these amendments. Rijiju said that the hard work of the last six months will not go to waste, and all the suggestions will be included in the new bill. He said that when there are too many amendments in a bill, it is a normal parliamentary procedure to withdraw the old bill and introduce a new bill.

The Central Government introduced the Income Tax Bill 2025 in the Lok Sabha on 13 February 2025. A 31-member Select Committee was formed under the chairmanship of BJP MP Baijayant Panda to examine the bill. The committee examined the bill and made 285 suggestions. The committee submitted its report to the Lok Sabha on 21 July 2025. The Central Government has accepted almost all the recommendations of the Select Committee. Some suggestions were also received that need to be incorporated to provide the correct legislative meaning.

What's in the new Income Tax Bill

The simplified Income Tax Bill is about half the size of the Income Tax Act of 1961, and seeks to achieve tax certainty by reducing the scope of litigation and new interpretation. The total number of words in the new bill introduced in the Lok Sabha has been reduced to 2.6 lakh, which is much less than the 5.12 lakh words of the current Income Tax Act. The number of sections in it is 536, while 819 sections are in force in the current law.

1200 provisions and 900 explanations removed

According to the FAQ issued by the Income Tax Department, the number of chapters in it has been reduced from 47 to 23. The Income Tax Bill-2025 has 57 tables, while there were 18 in the current Act. 1,200 provisions and 900 explanations have been removed from it. The provisions relating to exemptions and TDS/TCS have been made clearer in the Bill by placing them in a tabular format, while the chapter for non-profit organisations has been broadened with the use of simpler language. This has led to a reduction in the number of words by 34,547.

Tax assessment year concept eliminated

Taking a step in the interest of taxpayers, the new Bill uses the term tax year in place of the term previous year mentioned in the Income Tax Act, 1961. Also, the concept of tax assessment year has been eliminated. Currently, on income earned in the previous year (say 2023-24), tax is paid in the assessment year (say 2024-25). In this simplified Bill, the concept of the previous year and tax assessment year (AY) has been removed, and only the tax year has been included. Apart from the Income Tax Bill, the government is going to introduce eight new Bills during the month-long monsoon session. During this time, some other pending Bills will also be discussed.