Income Tax Bill 2025 ProposedThe new Income Tax Bill 2025 is set to be implemented from April 1, 2026, replacing the Income Tax Act, 1961.
By Aniket Chakraborty
Feb 12, 2025
Simplified TerminologyThe bill proposes replacing terms like ‘assessment year’ and ‘financial year’ with a single term, ‘tax year’.
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Key Changes in StructureThe new bill features 23 chapters, 16 schedules, and 536 clauses for better clarity, compared to 298 sections in the current Act.
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Clarity on Stock OptionsThe bill introduces clearer tax treatment for stock options (ESOPs), aiming to reduce tax disputes and incorporate judicial pronouncements.
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STCG Tax UnchangedThe Short-Term Capital Gains (STCG) tax rate remains unchanged at 20% with a tenure of 12 months.
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Smarter Tax AdministrationThe new law empowers the CBDT to introduce tax schemes and compliance measures independently, reducing bureaucratic delays.
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Focus on SimplicityThe new bill reduces the volume of the tax law, now just 622 pages, almost half of the current Act's length.
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Tax Governance ModernizedThe new bill includes modern compliance mechanisms and digital governance, improving the tax system's dynamism.
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Promoting Trust-Based SystemThe bill aims to foster a trust-based tax system, with scrutiny happening after filing rather than before.
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Legislative Process AheadThe bill is likely to be introduced in Parliament soon, followed by consultations in the standing committee for potential changes.