FM is unlikely to introduce New Income Tax Bill Budget 2025

The Finance Ministry is unlikely to introduce New Income Tax Bill during Budget 2025.

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:

1. Streamlining TDS/TCS systems with a unified schedule of rates.
2. Eliminating redundant TDS certificates due to digital Form 26AS availability.
3. Consolidating penalty provisions to enhance clarity and reduce disputes.

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.

The Institute of Chartered Accountants of India 𝗦𝘂𝗴𝗴𝗲𝘀𝘁𝘀 𝗥𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻 𝗼𝗳 𝗜𝗻𝗰𝗼𝗺𝗲 𝗧𝗮𝘅 𝗦𝗲𝗰𝘁𝗶𝗼𝗻𝘀 𝗶𝗻 𝗗𝗿𝗮𝗳𝘁 𝗕𝗶𝗹𝗹 2025.

The Institute of Chartered Accountants of India recommendation to reduce the number of sections in the Income Tax Bill 2025 aligns with the broader goal of simplifying tax laws and enhancing ease of doing business. Key Takeaways from ICAI’s Proposal:

• Removing outdated, redundant, or overly complex sections to Streamlining Provisions:,
• Making tax filing easier for businesses and individuals to reduce compliance burden:
• Clearer tax laws could lead to fewer disputes and litigation to enhance transparency.
• A simplified system might improve voluntary tax adherence to encouraging compliance.