Finance Minister Nirmala Sitharaman introduced the 2025 Income Tax Bill in Lok Sabha, aiming to simplify tax code. Bill to replace 1961 Act in FY 2026-27.
On Thursday, Union Finance Minister Nirmala Sitharaman introduced the 2025 Income Tax Bill in the Lok Sabha. Following its introduction, the bill was referred to a select committee for further examination.
Select Committee Review
The select committee is tasked with carefully reviewing the proposed changes to the Income Tax law. Their report, detailing their findings and recommendations, is expected to be submitted to Parliament by the first day of the next session.
Bill Objectives
While the draft legislation does not include major structural changes, Finance Minister Sitharaman stated that its primary goal is to simplify the language used in the tax code and remove any provisions that are no longer necessary. The aim is to make the Income Tax law easier to understand and navigate.
Effective Date
The Union government has proposed that the bill, upon successful clearance by Parliament, will come into effect in the financial year 2026-’27. Once enacted, the new legislation will replace the 1961 Income Tax Act, which has been amended multiple times over the years.
Budget Presentation
The introduction of this direct tax bill was initially proposed by the Finance Minister during the Budget presentation on February 1.
Bill Composition
The new Income Tax Bill consists of 536 sections, a notable increase from the 298 sections in the current law. Additionally, the draft legislation includes 16 schedules, compared to the 14 in the existing law.
Opposition Concerns
The Opposition has voiced concerns that the Union government has made the proposed legislation more complex rather than simpler. Congress MP Manish Tewari stated, “The Union finance minister said that the new Income Tax Bill would be easy. It has instead become more complicated.”
Parliamentary Session
The Lok Sabha has been adjourned until March 10, which marks the beginning of the second half of the Budget Session. The first part of the Budget session commenced on January 31 and continued until February 13. The session will reconvene on March 10 and continue until April 4.
Other Parliamentary Business
Besides the Income Tax Bill, the Lok Sabha also addressed other important matters. The report of the joint committee of Parliament on the Waqf (Amendment) Bill was tabled amidst protests by Opposition parties in both Houses.
Additionally, the Lok Sabha witnessed exchanges regarding the inclusion of Sanskrit in the list of languages for simultaneous interpretation in Parliament. The Lok Sabha also concluded the discussion on the Union Budget with Nirmala Sitharaman’s reply on Tuesday.
Sources: https://upstox.com/news/personal-finance/tax/new-income-tax-bill-2025-live-updates-date-time-fm-nirmala-sitharaman-introduce-i-t-bill-in-parliament-on-feb-13-expectations/liveblog-145572/
https://scroll.in/latest/1079131/parliament-refers-new-income-tax-bill-to-select-committee-for-review
https://www.thehindu.com/news/national/parliament-budget-session-new-income-tax-bill-live-february-13/article69213840.ece