The Finance Ministry is unlikely to introduce the new Income Tax Bill during Budget 2025. Although an internal committee led by Chief Income-Tax Commissioner V.K. Gupta has been reviewing the Income-Tax Act, the report is not expected to propose changes to tax rates. Instead, it focuses on simplifying the 1961 Income-Tax Act to make it concise, user-friendly, and accessible. The draft legislation will undergo scrutiny by the Standing Committee on Finance after preparation. The review aims to simplify the Act, making it more concise and user-friendly, but the new Income-Tax Bill requires more time and deliberation.
The New Income Tax Bill, often referred to as the New Direct Tax Code, is unlikely to be introduced before the FY 2026 Budget. While the Committee is finalizing its comprehensive review of the Income-Tax Act, further drafting, consultations, and scrutiny will delay the formal introduction of the Bill. The new income-tax Bill is unlikely to be introduced during the Budget 2025 session. The V.K. Gupta Committee is expected to submit its review report soon, focusing on simplifying the Income Tax Act by:
The Income-Tax Act includes key aspects such as charging income tax, defining five heads of income (salaries, house property, business/profession, capital gains, and other sources), determining tax rates, offering deductions and exemptions, outlining assessment and collection processes, and imposing penalties and interest for non-compliance. The draft bill will undergo scrutiny, public consultation, and parliamentary review before formal introduction.
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