Union Finance Minister Nirmala Sitharaman on Thursday tabled the new Income Tax Bill in the parliament.
The new Income Tax bill is meant to simplify the direct taxation regime and replace the Income Tax Act of 1961. It was cleared by the Union Cabinet last week.
Previously, the CNN-News 18 had reported that the bill could be referred to the Parliamentary Standing Committee on Finance for broader consultation.
In her Budget speech, Sitharaman said that she would introduce a new income tax bill as a affirmation of the “commitment of the tax department to ’trust first, scrutinise later’”. The new income tax bill has been pitched as part of the government’s outreach to the middle class that comprises tax breaks and simplification of tax-collection and filing.
“The new bill will be clear and direct in text with close to half of the present law, in terms of both chapters and words. It will be simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation,” said Sitharaman.
Once passed by the parliament, the bill will come into effect on April 1, 2026, according to CNBC-TV18.
Sources were reported as alluding that the new Income Tax Bill aims to bring in ease of compliance as new simplified rules will help reduce compliance processes by streamlining paperwork, integrating digital platforms, and simplifying return filing mechanisms.
Among the changes, the bill proposes to replace the ‘assessment year’ with simpler ’tax year’, with tax year referring to the 12-month period of the financial year starting April 1, as per the report, which added that the term ‘previous year’ will be replaced by ‘financial year’.
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Amid uproar over Waqf report, Sitharaman tables new Income Tax Bill in Parliament
