Important Keywords: Income Tax Bill 2025, New Income Tax Law India, Income Tax Slabs 2025, Income Tax Act Replacement, Digital Tax Compliance India, Income Tax Reforms 2025, Tax Filing Rules India, Income Tax Deductions 2025, Lower Tax Rates India, Anti-Tax Evasion Measures,
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Table of Contents
Introduction
The Income Tax Bill 2025 is a landmark legislation set to overhaul the existing tax framework in India. Expected to be tabled in Parliament on February 13, 2025, this bill is designed to replace the Income Tax Act of 1961, incorporating modern compliance mechanisms, digital solutions, and a streamlined tax administration.
Note: The provisions of this bill will come into effect only after receiving approval from both houses of Parliament and the President’s assent. If passed, it will be applicable from April 1, 2026.
What is the Income Tax Bill 2025?
The Income Tax Bill 2025 lays down the rules for taxation in India, defining how income tax is levied, administered, collected, and recovered. It consists of:
- 536 Sections
- 23 Chapters
- 16 Schedules
These provisions ensure a well-defined taxation process for individuals and businesses.
Chapters in the Income Tax Bill 2025
This bill is divided into 23 chapters, each focusing on a different aspect of taxation. Below is a summary of these chapters:
| Chapter | Overview |
|---|---|
| Chapter I | Preliminary |
| Chapter II | Basis of Charge |
| Chapter III | Incomes Exempt from Total Income |
| Chapter IV | Computation of Total Income |
| Chapter V | Inclusion of Others’ Income in Assessee’s Income |
| Chapter VI | Aggregation of Income |
| Chapter VII | Set-off and Carry Forward of Losses |
| Chapter VIII | Deductions in Computing Total Income |
| Chapter IX | Rebates and Reliefs |
| Chapter X | Provisions to Prevent Tax Avoidance |
| Chapter XI | General Anti-Avoidance Rules (GAAR) |
| Chapter XII | Payment Methods in Certain Cases |
| Chapter XIII | Tax Determination in Special Cases |
| Chapter XIV | Tax Administration |
| Chapter XV | Filing of Income Tax Returns |
| Chapter XVI | Assessment Procedures |
| Chapter XVII | Special Tax Provisions for Specific Individuals |
| Chapter XVIII | Appeals, Revisions, and Dispute Resolution |
| Chapter XIX | Tax Collection and Recovery |
| Chapter XX | Refunds |
| Chapter XXI | Penalties |
| Chapter XXII | Offenses and Prosecution |
| Chapter XXIII | Miscellaneous |
Objectives of the Income Tax Bill 2025
The bill aims to achieve the following key objectives:
- Simplified Taxation – A clear and concise tax framework for easier compliance.
- Lower Tax Rates & Higher Rebates – Encouraging savings and boosting economic growth.
- Reduced Legal Disputes – Implementing transparent tax administration to minimize ambiguities.
- Easier Compliance Mechanisms – Digital enhancements to promote seamless tax filing.
Scope of the Income Tax Bill 2025
The tax liability of an individual or business depends on residential status, categorized as follows:
| Income Type | Resident & Ordinarily Resident (ROR) | Resident but Not-Ordinarily Resident (RNOR) | Non-Resident (NR) |
| Income received in India | Taxable | Taxable | Taxable |
| Income accrued in India | Taxable | Taxable | Taxable |
| Foreign income from an India-controlled business | Taxable | Taxable | Non-taxable |
| Foreign income from a foreign-controlled business | Taxable | Non-taxable | Non-taxable |
| Past untaxed foreign income remitted to India | Non-taxable | Non-taxable | Non-taxable |
Key Features of the Income Tax Bill 2025
- Direct Taxation – The liability cannot be transferred to another individual.
- Central Government Regulation – The tax system is governed by the Union Government.
- Annual Taxation – Taxes are calculated based on income earned in the financial year.
- Progressive Tax System – Higher-income individuals pay at increased rates.
- Deductions & Exemptions – Specific deductions are capped annually.
Conclusion
The Income Tax Bill 2025 represents a progressive step towards modernizing India’s tax system. By simplifying provisions, ensuring ease of compliance, and reducing litigation, this bill aims to create a transparent and efficient taxation framework.
Stay updated with us for more insights and updates on Income Tax Bill 2025!
Frequently Asked Questions (FAQs)
Q1. When will the Income Tax Bill 2025 come into effect?
If passed by both houses of Parliament and signed by the President, the bill will be enforced from April 1, 2026.
Q2. How is the Income Tax Bill 2025 different from the Income Tax Act of 1961?
The new bill introduces simplified tax provisions, digital compliance mechanisms, reduced tax rates, and streamlined dispute resolution.
Q3. Will tax rates change under the new bill?
Yes, the bill proposes lower tax rates and increased rebates, making taxation more taxpayer-friendly.
Q4. How does the bill address tax evasion?
By implementing digital tax administration, removing ambiguities, and strengthening anti-avoidance provisions, the bill aims to curb tax evasion.
Q5. Where can I download the Income Tax Bill 2025 PDF?
Once officially released, you can download the Income Tax Bill 2025 PDF from the official Income Tax Department website or the Finance Ministry portal.
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More Information: https://taxinformation.cbic.gov.in/
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