New Delhi: Finance Minister Nirmala Sitharaman is expected to present the New Income Tax Bill 2025 in the Lok Sabha on Thursday, February 13, 2025. The government has already released the draft of the Income Tax Bill on Wednesday. The government has maintained that the new bill aims to simplify the income tax law by making several changes in its language. The biggest change will be to use the word ‘tax year’ instead of ‘financial year’ or ‘assessment year’ for tax calculation.
The New Income Tax Bill explains which and what type of income will not be considered a part of total income at the time of tax calculation. Several rules are proposed for this in the draft.
Chapter 3 of the new Income Tax Bill explains which incomes will not be part of your total income.
Incomes not to be included in total income
The New Income Tax Bill 2025 mentions that the income falling in those categories under the clauses made in Schedule-2, 3, 4, 5, 6 and 7 of the Bill will not be considered as part of the total income for calculating tax. Such incomes will be calculated differently as per the rules mentioned in the schedule. This would include income from insurance money, farming, and income from PF etc.
The bill states that if the conditions set for the categories mentioned in the schedule are not fulfilled in any tax year, then the tax on them will be calculated as per the tax rules of that year.
The Central Government can make rules for Schedule-2,3,4,5,6 and 7 of the Bill and also issue new notifications for them.
Incomes not to be included in total income of political parties and electoral trusts
The rules of Schedule-8 of the Bill will be applicable while calculating the total income of any political party or electoral trust.
In computing the total income of any political party or an electoral trust for a tax year under this Act, any income enumerated in Schedule VIII shall not be included, subject to fulfilment of conditions specified therein.
Schedule-8 states that political parties will have to maintain accounts of income, capital gains etc. from their property. If they accept electoral bonds worth more than Rs 20,000, the record will have to be maintained. It cannot take donations of more than Rs 2,000, if it does so then it will have to keep a record of it.
Computation of Total Income
Save as otherwise provided in this Act, all incomes shall, for the purposes of charge of income-tax and computation of total income, be classified under the following heads of income:—
(a) Salaries
(b) Income from house property
(c) Profits and gains of business or profession
(d) Capital gains
(e) Income from other sources
New Income Tax Bill 2025 simplifies tax laws by replacing ‘financial year’ with ‘tax year’. The bill specifies incomes exempt from total income calculations, detailed in Schedules 2-7, including farming income and insurance payouts. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
