Kolkata: The new Income Tax Bill is supposed to replace the Income Tax Act 1961 nearly 64 years after the legislation on Income Tax came into effect. Therefore, the Bill which is expected to shed unnecessary and intimidating officialese and jargon is going to be a landmark effort and has already raised curiosity levels of both income tax professionals as well as a vast section of the common men and women. But the moot question is, what difference will it make in income tax rates and slabs announced for FY26 by Union finance minister Nirmala Sitharaman.
The answer is a simple NO. The Income Tax slabs, rates and rebates announced by the FM in Budget 2025 will not be changed by the new Income Tax Bill. Its principal aim is to reduce the volume of the Act and make it simpler so that it becomes intelligible to the common man. According to reports, proposed Bill could trim the number of sections by one-fourth or more. One of the key objectives of the revision of the legislation is to increase transparency of convoluted and long-winded income tax laws and rules.
The FM has already said on the day of the Budget that after the Bill is placed in Parliament it will be sent to the Standing Committee on Finance. The committee will, in turn, hold consultations with different stakeholders and seek their suggestions on how to further modify it, if needed. The next steps will follow in due course. However, the FM also avoided a direct reply to the question whether it will be implemented in the coming financial year. The Bill was given the green light by the Union Cabinet on February 7.
What could be the contents of the New Income Tax Bill
Reach a simplified tax code which will be a departure from the jargon-heavy and officialese-laden Income Tax Act 1961. It has been stated that it will enable taxpayers to have a much clearer understanding of the legal requirements.
The Income Tax Act 1961 comprises 298 sections spread over 23 chapters. Officials have indicated that the volume of the legislation will be halved though it will cover all the areas such as personal income tax, corporate taxes, securities transaction tax and gift tax.
The new Bill is expected to increase ease of compliance — the Income Tax laws have often been said to be too heavy on compliance for comfort for the average taxpayer.
Experts have also emphasised that the provisions will be drafted in such a way so as to reduce instance of litigation, which not only result in loss of administrative time and effort but also delay revenue collection.
“We have been given to understand that the new Income Tax Bill will be easier to understand by the common man. It will also be smaller in size. One important objective is to reduce the litigations that are usually seen in the world of direct taxes,” said Himadri Mukhopadhyay, secretary, Income Tax Bar Association Calcutta.
The New Income Tax Bill is expected to be placed in Parliament by the government in this week. It will be the first revamp of the Income Tax Act which came into effect in 1961. The moot question is, what will the contents of this Bill? Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
