Description

Copyright infringement not intended

Context:

The Income-tax Bill 2025 was introduced in Lok Sabha.

About the Income Tax Bill 2025

It aims to simplify the Income-tax Act, 1961 by streamlining provisions, removing obsolete references, and creating a crisper and simpler legal framework.

It focuses on clarity, ease of understanding, and reducing redundancy while maintaining continuity in the direct taxation structure.

Bill Simplify the existing Income-tax Act

Shorter and Clearer Language:

The Bill reduces the word count from 5.12 lakh to 2.60 lakh and removes 1,200 provisos and 900 explanations.
It uses simpler language and illustrative tables for better understanding.

Fewer Chapters and Sections:

The Bill has 23 chapters (down from 47) and 536 sections (down from 819 effective sections in the Act).
Redundant provisions, including those for capital gains, deductions, and dispute resolution, have been omitted.

Tabular Format:

Over 57 tables (compared to 18 in the 1961 Act) provide details on deductions, TDS/TCS rates, and exemptions.

Changes introduced in the Bill

Tax Year Concept:

The Bill introduces the concept of a “tax year”, defined as the 12-month period starting April 1.
It replaces the existing “assessment year” (AY) and “previous year” concepts, simplifying tax calculations.

Virtual Digital Assets:

Cryptocurrencies and other virtual digital assets (VDAs) are included in the definition of property and treated as capital assets.

Social Media Access:

Income tax authorities can access “virtual digital space”, including social media accounts, email servers, and cloud storage, during surveys, searches, and seizures.

Dispute Resolution: