Income Tax Bill Cleared; To Table in Parliament

Aakhir Tak – In Shorts

The Union Cabinet has approved the new Income Tax Bill. It’s likely to be presented in the Lok Sabha on Monday. The bill aims to streamline the existing tax structure. The government has stated that it will not introduce new taxes. Finance Minister Nirmala Sitharaman announced its intent in Budget 2025.

Aakhir Tak – In Depth

The Union Cabinet approved the new Income Tax Bill on Friday, and it is likely to be introduced in the Lok Sabha on Monday, according to sources. This bill is part of a broader effort to reform the tax system. The new legislation, often called the Direct Tax Code, aims to make the current tax structure more streamlined and transparent. While presenting the Union Budget 2025, Finance Minister Nirmala Sitharaman announced the government’s intention to introduce a new Direct Tax Code.

The bill is likely to be referred to the Standing Committee for further discussion and refinement. The government has already clarified that this Income Tax Bill will not introduce any new taxes. Its primary focus will be on simplifying tax laws, removing ambiguities, and ensuring ease of compliance for taxpayers. Additionally, several amendments are expected to the existing law, focusing on reducing litigation.

One potential provision involves reducing penalties for specific offenses, making the tax framework less punitive and more taxpayer-friendly. A key aspect of the new bill will be simplifying legal language, ensuring ordinary taxpayers can easily understand tax provisions and their implications. This bill will reflect the government’s decade-long effort to enhance taxpayer convenience.

During her Budget speech on February 1 in the Lok Sabha, the Finance Minister emphasized the tax department’s “trust first, scrutinize later” approach, reinforcing the government’s commitment to easing compliance. “It will be simple to understand for taxpayers and reduce litigation,” said Nirmala Sitharaman.

Sandeep Chilana, Managing Partner, CCLaw, stated, “A complete overhaul of the Income Tax Act is a bold step, but the real question is whether it will truly simplify compliance or just reorganize complexities.” He added, “If the new law can bring predictability, reduce disputes, and ease tax administration, it will be a game-changer.”

However, businesses and professionals will be closely monitoring how it addresses legacy issues like retrospective taxation, complex exemptions, and litigation-heavy provisions. The success of this reform will depend on effectively balancing revenue needs with a taxpayer-friendly approach. The tax system is targeted to get more efficient.

Aakhir Tak – Key Takeaways to Remember

• The Union Cabinet approved the new Income Tax Bill.
• The bill’s goal is to simplify tax laws.
• No new taxes will be introduced.
• The bill focuses on reducing litigation.
• Taxpayer convenience is a key focus.

Aakhir Tak Editor-in-Chief

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