(Image source from: PTI)

Finance Minister Nirmala Sitharaman is anticipated to present the New Income Tax Bill on Thursday, February 13. In her Budget 2025 address, Sitharaman indicated that the bill would be introduced during the current session of Parliament. She emphasized that this new legislation is designed to embody the principles of “Nyaya” and aims to be straightforward, boasting nearly half the content of the existing law in terms of chapters and language. The intention is to simplify the understanding of the tax terms for both taxpayers and tax officials, ultimately leading to greater tax certainty and minimizing disputes.

The Income Tax Act, enacted in 1961, originally spanned 880 pages. Over time, it has undergone numerous amendments through various budgets. The primary goal of the new bill is to refine and clarify the Income Tax Act of 1961, which many taxpayers find convoluted and challenging to navigate. Munjal Almoula, Head of Tax at BDO India, expressed hope that the new legislation would eliminate superfluous and outdated provisions.

Almoula noted, "The new tax bill appears to simplify language and remove unnecessary tax regulations, thus making compliance easier for taxpayers. As a result, we can expect a more streamlined compliance process, better transparency regarding tax assessments, and a quicker, more efficient mechanism for refunds." According to PTI, the proposed bill will encompass 536 sections and 23 chapters, totaling 622 pages. Additionally, it will incorporate clearer terminology, substituting 'Previous Year' with 'Tax Year' and eliminating the term 'Assessment Year.'

Furthermore, the upcoming bill is expected to alleviate legal complexities, making the entire system more user-friendly. It is also likely to extend the deadlines for filing income tax returns and enhance initiatives to combat tax evasion.