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Informist, Thursday, Feb. 13, 2025

 

--Sitharaman introduces Income Tax Bill, 2025 in Lok Sabha 

--Sitharaman: Substantial changes have been made to Income Tax Act, 1961 

--Sitharaman: Move motion to form Select Committee on Income Tax Bill, 2025 

 

NEW DELHI – Finance Minister Nirmala Sitharaman on Thursday introduced the Income Tax Bill, 2025 in the Lok Sabha. The new Bill has "substantial" changes made to the original Income Tax Act, 1961, Sitharaman said while introducing the Bill. Members of the Opposition, however, claimed that only "mechanical" changes had been made to the older Act, and barely any simplification was made to it. 

 

Sitharaman also moved a motion in the Lower House to form a parliamentary panel on the Income tax Bill, 2025, comprising a few members selected by the Speaker of the House, Om Birla. "The terms and conditions of the select committeee will also be decided by the Speaker," she said, adding that the committee would submit a report by the first day of the next session of Parliament. 

 

Announced in the full Budget for 2024-25 (Apr-Mar), the new Income Tax Bill aims to simplify the Income Tax Act, 1961, and make it simpler, more lucid and easier for taxpayers to calculate taxes and file returns. Following the announcement, the Central Board of Direct Taxes set up an internal committee in October to carry out a comprehensive review of the Income Tax Act.

 

A copy of the proposed Income Tax Bill, 2025 shows that it has 536 sections and 23 chapters, spread across 622 pages, 201 pages fewer than the older Act. The document has been shortened in length primarily by removing explanations.

 

Proceduraly, it aims to give greater autonomy and powers to the income tax department and government to bring about policy changes and amnesty schemes for taxpayers. The government, however, will have to lay these notifications before each House of the Parliament after issuing them.

 

The new bill also proposes to replace 'assessment year' and 'previous year' with 'tax year', making the language easier for taxpayers. "For the purposes of this Act, 'tax year' means the twelve months period of the financial year commencing on the 1st April." The use of the phrase 'assessment year', which refers to the year following the one for which tax is being paid, caused confusion among taxpayers, especially new ones.

 

Under the new bill, taxpayers will also need to report their crypto transactions. "Any person, being a reporting entity, as prescribed, in respect of a crypto-asset, shall furnish information in respect of a transaction of such crypto-asset in a statement," the bill said.  End

 

Reported by Priyasmita Dutta

Edited by Avishek Dutta

 

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