What is the New Income Tax Bill 2025?
The Income Tax Bill 2025 is a major reform proposed to replace the current Income Tax Act of 1961. A special committee has reviewed the old law and recommended 285 changes to make it simpler, fairer, and more efficient. The new bill aims to modernize the Indian tax system and make it easier for taxpayers to understand and follow. If approved, it may come into effect from April 2026.
285 Changes Suggested in Old Tax Law
The select committee has listed a wide range of updates in the draft bill. These include changes in tax filing, refunds, deductions, and the language used in legal documents. The goal is to remove confusion, reduce legal disputes, and create a smooth process for both taxpayers and the Income Tax Department. Many of these tax law changes in India focus on using technology to speed up processing and improve compliance.
No Refund Cuts for Late Filing Now
A big relief for taxpayers is the proposed rule that there will be no reduction in refunds even if tax returns are filed late. Currently, filing after the deadline may lead to a lower or delayed refund. Under the Income Tax Bill 2025, this will change. Taxpayers who miss the deadline by a short time can still receive their full refund, which encourages more people to file without fear of penalty.
Dividend Deductions May Return Soon
Another positive move is the plan to bring back dividend deductions for companies. Earlier, firms could deduct dividends from their taxable income, but this benefit was removed. Now, the committee recommends allowing these deductions again, which could encourage companies to reward shareholders. This would also increase investor confidence in Indian markets. More details are available in the GKToday Report.
ICAI Wants Tax Language Made Easier
One of the key recommendations by the Institute of Chartered Accountants of India (ICAI) is to simplify the language of tax laws. They want the Income Tax Bill 2025 to use clear, everyday words instead of complex legal terms. This would help common taxpayers understand their rights, responsibilities, and benefits without needing expert help every time.
Privacy Issues Raised Over Data Search
Some experts have also raised concerns over data privacy. The new bill includes provisions for searching financial records online, which may involve accessing bank and investment data. Critics argue that proper safeguards must be added to protect taxpayers’ privacy and prevent misuse of personal information. This has become a major topic in the ongoing discussions.
Bill May Roll Out from April 2026
If everything goes as planned, the Income Tax Bill 2025 could be implemented in the next financial year, starting April 2026. The government is expected to table the bill in Parliament soon. Once passed, it will become one of the biggest reforms in India’s tax system in over 60 years.
Stay tuned with Notifire for more updates.
