After a major budget that saw the FM making some crucial announcements regarding direct taxation in India, the New Income Tax bill is all set to become the next big move in the Indian taxation realm.
The new Income Tax Bill 2025 is set to be tabled in the Lok Sabha. This bill will replace the 60-year-old Income Tax Act of 1961.
The Union Cabinet approved the new Income Tax Bill on Friday.
Simplification Of Taxation
One of the key aspects of FM Nirmala Sitharaman's February 1 budget was bringing convenience to taxpayers. This was indicated by changing the IT slabs and increasing the primary taxation threshold from the previous Rs 8 lakh to the new Rs 12 lakh per annum.
One of the key aspects of FM Nirmala Sitharaman's February 1 budget was bringing convenience to taxpayers. | PTI
Another key element of her budget was the ever-elusive simplification of the taxation system in the country. Taxation in the country has long been deemed complicated.
Therefore, one of the key focuses of the new bill would be to simplify the system.
25-30 per cent Section To Be Removed
The new bill intends to make the taxation system more concise and easier to comprehend. This will be achieved through simplification of legal terminology to make it more accessible for taxpayers to understand the provisions, thereby enhancing clarity.
As per some reports, the new tax bill may slash the number of sections in the act/bill by 25-30 per cent.
Representative Image | File Pic
Accessibility and Compliance
According to the government, this simplification will make the tax system more accessible, which in turn will lead to greater compliance. This is because taxpayers will not have to deal with ambiguities.
Rationalisation And Efficiency
The new bill is expected to rationalise tax rates. These new rates will align with global standards. This is expected to increase efficiency, thereby making India a more attractive destination for both domestic and foreign businesses.
It is anticipated that the simplification of tax laws will greatly lessen the cumbersome burden of litigation for both individuals and enterprises alike, thereby potentially furthering investment avenues.
