New Delhi: Union Finance Minister Nirmala Sitharaman tabled the new Income Tax Bill in Parliament on Thursday in a significant step towards simplifying the language and structure of the Income-Tax Act, 1961.
“The new Income Tax Bill has been tabled. The bill aims to simplify the language of the existing law as amended to date. (A copy of) the bill is available at our website… Our FAQs address common queries regarding objectives and the outcome,” Sitharaman’s office tweeted.
The simplification exercise was guided by three core principles, according to a Ministry of Finance press release. They are:
* Textual and structural simplification for improved clarity and coherence.
* No major tax policy changes to ensure continuity and certainty.
* No modifications of tax rates, preserving predictability for taxpayers.
The ministry adopted a three-pronged approach:
* Eliminating intricate language to enhance readability.
* Removing redundant and repetitive provisions for better navigation.
* Reorganizing sections logically to facilitate ease of reference.
The Ministry adopted a consultative and research-based approach in formulating the new Income Tax Bill. It ensured widespread stakeholder engagement, consultation with taxpayers, businesses, industry associations, and professional bodies.
Of the 20,976 online suggestions received, relevant suggestions were examined and incorporated, where feasible, the Ministry said.
Consultations were held with industry experts and tax professionals and simplification models from Australia and the UK were studied for best practices.
The review has led to a substantial reduction in the Act’s volume, making it more streamlined and navigable.
The wordage has been almost halved – from 512,535 words in the existing Income-Tax Act, 1961 to 259,676 words in the Income-Tax Bill, 2025.
The number of chapters has been reduced from 47 to 23, and there are 536 sections in place of the existing 819.
The number of tables have gone up from 18 to 57 and there are 46 formulae in the new bill compared to 6 earlier.
