Parliament to table the Income Tax Bill 2025 on July 21. Learn what’s changing—simpler tax rules, no AY, and 285 suggestions from the Select Committee.
Income Tax Bill 2025: 285 Changes Proposed — What It Means for You
India is on the brink of a historic overhaul of its tax system. The Income Tax Bill, 2025—designed to replace the six-decade-old Income Tax Act of 1961—is all set to be tabled in the Lok Sabha on July 21, marking the start of a massive transformation in how we calculate, file, and understand taxes.
Here’s everything you need to know about what’s coming, in plain English.
What’s Happening?
- A 31-member Select Committee, chaired by Baijayant Panda, has reviewed the draft Income Tax Bill 2025.
- The Committee made 285 detailed suggestions.
- They adopted the report on July 16, and it will now be tabled in the Lok Sabha on July 21 for further discussion and action.
- The Bill was introduced by Finance Minister Nirmala Sitharaman on February 13.
Key Highlights of the New Income Tax Bill 2025
✅ Simplified & Streamlined
- Word count reduced: From 5.12 lakh (old law) to 2.6 lakh words.
- Number of sections: Cut from 819 to 536.
- Chapters halved: From 47 to 23.
- Provisos removed: 1,200 deleted.
- Explanations dropped: 900 deleted.
More Tables, Less Confusion
- Tables increased: 57 new tables added (vs. 18 in old law).
- Complex provisions like TDS, TCS, and exemptions are now in tabular format for clarity.
Taxpayer-Friendly Changes
- ‘Previous Year’ replaced with ‘Tax Year’ – goodbye confusion!
- No more ‘Assessment Year’ – tax year concept simplifies compliance.
- Plain, clear language is used in clauses relating to not-for-profit organisations and others.
Why This Matters to You
This is not just a technical rewrite—it’s a practical game-changer for:
- Salaried employees: Less legal jargon, easier filing
- Senior citizens & investors: Clearer rules on capital gains, TDS
- Startups & MSMEs: Better understanding of exemptions, deductions
- NGOs & Trusts: Comprehensive guidance in simpler language
What’s Next?
- The Bill will be tabled in Lok Sabha on July 21, 2025 during the Monsoon Session (which runs till August 21).
- Expect debates, possible tweaks, and then voting before it becomes law.
- Once passed, it will replace the Income Tax Act of 1961 entirely.
Conclusion: India’s Tax Future Just Got Simpler
The Income Tax Bill 2025 is an ambitious, long-overdue reform aimed at bringing transparency, clarity, and simplicity to a notoriously complex system. Whether you’re an investor, retiree, employee, or entrepreneur, this Bill will impact how you plan, earn, and pay taxes.
Keep an eye out, understand the changes, and be prepared to update your tax strategy accordingly.
