Simplified Income Tax Bill 2025 Set to Transform Tax Framework

The Income Tax Bill 2025, reforming the outdated 1961 Act, is expected for parliamentary introduction. It simplifies tax reporting by introducing a 'tax year' concept and eliminating complex terms. The Bill's concise structure aims to clarify taxpayer rights and obligations with reduced confusion and litigation.

The Income Tax Bill 2025 is poised for introduction in Parliament on Thursday, aiming to overhaul the archaic 1961 Act. The new bill reduces complexities by introducing a 'tax year' concept and eliminating confusing terms like 'previous' and 'assessment years.'

Containing 536 sections over 622 pages, the Bill streamlines income tax terms, offering a more straightforward interpretation for taxpayers. A taxpayer's charter outlining rights and responsibilities is also included, along with clarifications on ESOPs to reduce disputes.

The Bill's objective is a comprehensive restructuring of the tax code, maintaining 23 chapters and extending to 16 schedules, to address issues raised by tax administrators and stakeholders. The initiative responds to the government's 2024 announcement for a lucid tax statute.

(With inputs from agencies.)