Income Tax Bill 2025: Sections of the Income Tax Act will be reduced, and filing ITR will become easier

The Government of India has introduced the Income Tax Bill 2025. It aims to simplify the tax process for taxpayers, reduce litigation, and ease tax compliance. This new bill will be half the size of the existing Income Tax Act 1961 and will reduce complexities. The specialty of this new Act will be that after its implementation, filing ITR will become easier.

Key highlights of the new Income Tax Bill

• The number of words has been halved as compared to the Income Tax Act, 1961.
• The number of words in the new Income Tax Act has been reduced to 2.6 lakh words, whereas earlier it had 5.12 lakh words.
• The number of sections has been reduced to 536. Earlier there were 819 sections in the Income Tax Act 1961.
• The number of chapters has been reduced from 47 to 23.
• 57 tables have been added in the new Income Tax Act. The 1961 Act had only 18 tables.
• 1,200 provisions and 900 clarifications have been deleted.

Benefits to taxpayers

• Relief from litigation: Tax laws have been simplified and clarified, reducing disputes over interpretation.
• Easier Tax Compliance: Deductions like Salary, Pension, Gratuity, VRS are now clubbed under one chapter.
• The rules of TDS/TCS have been tabulated, which will make it easier for taxpayers to understand.
• The decisions of the courts have been given priority so that there is no need for repeated legal interpretation.
• There have been no major policy changes or changes in tax rates.

How much change in

According to the Income Tax Department, there has been no change in tax rates in the new bill. It is only focused on simplifying and clarifying the tax structure, so that taxpayers can easily file returns.

• Exemptions and TDS/TCS rules have been simplified. These have now been put in a tabular form, which will make it easier for taxpayers to understand.
• No major change has been made in the tax rates. The government has clarified that no change has been made in the tax rates in the new bill.
• The rules for non-profit organisations have been eased so that they can work better with the government.

Common Taxpayers Convenience

• Filing ITR will be easier: Under the new provisions, tax benefits like salary, gratuity, pension, VRS compensation have been consolidated at one place.
• Less documentation process: Complexities of tax compliance have been reduced, thereby speeding up the tax filing process.
• Tax stability: There has been no major change in the existing tax structure, so taxpayers will not have to bear any additional burden.

When will the new income tax law be implemented?

The Income Tax Bill 2025 has been sent to the Select Committee of the Lok Sabha, which will submit its report by March 10, 2025. After this it will be passed in Parliament and the process of implementation will begin.