FM Nirmala Sitharaman to Present New Income Tax Bill: How It Benefits Taxpayers

As Finance Minister Nirmala Sitharaman is expected to bring the New Income Tax Bill in the Lok Sabha today, there is a lot of conjecture over the bill's substance and possible effects on taxpayers.

Tax experts predict that the new income tax bill, which prioritizes modernization and simplification over the introduction of new taxes, will significantly alter India's tax structure. Although specifics are still being worked out, the bill is expected to simplify compliance, simplify the law, and make tax laws easier for taxpayers to understand.

Notably, Finance Minister Nirmala Sitharaman hinted on Saturday that the New Income Tax measure would be brought into Parliament the following week following the Union Cabinet's ratification of the measure on Friday.

Goal of New Income Tax Bill 

The goal of this bill is to improve compliance, streamline tax rules, and lower litigation. The newly introduced bill would replace the six-decade-old Income Tax Act, of 1961. In the Budget 2024, the FM initially suggested a thorough overhaul of the tax code, highlighting the need for a more transparent and taxpayer-friendly structure.

ALSO READ: RBI Slashes Repo Rate: Big Relief for Borrowers?

ALSO READ: Budget 2025: Agriculture, Defence, Railway, Health and Other Sectors Summary in FM Speech

Key Features of New Income Tax Bill

As per the media sources, the newly proposed Income Tax Bill in the parliament will streamline the legalities of the law. Check the proposed key features of the bill:

No New Taxes – The bill does not introduce any new taxes.

Simpler Language – Legal terms are made easier to understand.

Shorter Structure – The new bill is expected to be 50% shorter than the current law.

Lower Penalties – Certain offences will have reduced penalties.

Withholding Tax Changes – The bill aims to simplify tax deduction rules.

Removal of Outdated Rules – Old, unnecessary provisions will be removed.

Single Tax Framework – Different tax systems will be combined into one for ease of business.

Less Tax Disputes – The reforms aim to reduce conflicts and make compliance easier.

Improved Efficiency – The changes will benefit both individuals and businesses by making tax filing simpler.

New Income Tax Bill will Come Into Effect

The bill will be put into effect in fiscal year 2025–2026 after undergoing parliamentary review and final approval.