Budget 2025: Is India Ready for the New Income-Tax Bill?

Delhi - India’s Income-Tax Act of 1961 is set to undergo a transformative overhaul. Finance Minister Nirmala Sitharaman initiated a comprehensive review of the law, aiming to simplify and modernize the tax structure. The government formed a special committee, led by the Chief Income-Tax Commissioner, to address the outdated provisions, reduce complexities, and make the system more user-friendly for taxpayers.  

Delays Amid Complexity

Despite the urgency of reforms, the introduction of the new Income-Tax Bill during Budget 2025 appears unlikely. Drafting a fresh tax law requires extensive consultations with the Law Ministry and scrutiny by the Standing Committee on Finance. These procedural challenges have pushed the timeline, indicating that the legislation might only be tabled after this year’s Budget session.  

Key Areas Under Review

The reform agenda focuses on simplifying compliance processes, reassessing exemptions like house rent allowances, and updating penalty provisions. Other crucial areas include streamlining TDS/TCS regulations and ensuring greater clarity in tax rules. The aim is to reduce ambiguities and make the system more transparent and efficient for individuals and businesses alike.  

Engaging Public Participation

In a progressive move, the committee has invited public suggestions through an online portal. This approach ensures that the new legislation reflects the needs and expectations of diverse stakeholders, promoting inclusivity and trust in the reform process.