Lok Sabha Passes New Income Tax Bill, 2025

 Lok Sabha Passes New Income Tax Bill, 2025: A New Era for Taxation in India 


The Lok Sabha has passed the new Income Tax Bill, 2025, after intense debates and deliberations. This significant legislative development aims to replace the Income-tax Act, 1961, with a more transparent and taxpayer-friendly framework.


*Background:*

- *Revised Legislation:* The revised Bill incorporates recommendations from the Select Committee, addressing drafting errors and ambiguities in the earlier draft.

- *New Tax Code:* The Bill consists of 536 clauses and 23 chapters, providing a comprehensive overhaul of India's income-tax law.


*Key Objectives:*

- *Simplified Language:* The Bill aims to make tax provisions easier to understand for both taxpayers and professionals.

- *Reduced Litigation:* The focus is on minimizing disputes through clearer drafting and rules.

- *Taxpayer-Friendly System:* The Bill is designed to streamline compliance and improve taxpayer experience.


*Why the Change Was Needed:*

- *Criticism of Previous Draft:* The earlier draft faced criticism for lack of clarity and potential for interpretational disputes.

- *Government's Commitment:* The government withdrew the previous draft to ensure the replacement law is clear, fair, and effective in meeting modern economic and administrative needs.


*Next Steps:*

- *Rajya Sabha Consideration:* The Bill will now move to the Rajya Sabha for consideration before it becomes law.

- *Effective Date:* The new tax code is scheduled to take effect from April 1, 2026.


This development marks a significant step towards modernizing India's tax laws and improving the taxpayer experience. The new Bill aims to provide a more transparent and efficient tax system, benefiting both taxpayers and professionals.

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