The central government is expected to introduce the new Income Tax Bill 2025 in Parliament by the Finance Minister Nirmala Sitharaman on Thursday, February 13. The New Income Bill aims to simplify tax laws. It also makes compliance easier, and help taxpayers know the rules without needing professional help.
Key Highlights of the New Bill
The bill consists of 23 chapters, 536 clauses, and 16 schedules, covering different aspects of tax regulations.
What Might Change?
One major change is the use of simpler terms. The bill suggests replacing the term Assessment-Year with Tax Year and Previous Year with Financial Year. This will in line with the tax period with the financial year, which goes on from 1st April to 31st March 2025.
For new companies or professions, the tax year will begin from the date they start operations and end when the financial year closes. Likewise, if a person starts earning from a new source in the middle of the year, their tax year will start from that date, and is ending with the financial year.
Another major change is the inclusion of virtual digital assets. The inclusion of virtual digital assets covers cryptocurrencies, under undisclosed income. At prresent, this category includes Rupees, bullion, and jewellry.
The IT bill also gives more authority to the CBDT (Central Board of Direct Taxes) to set tax administration rules, implement compliance measures, and monitor tax activities digitally. This will reduce the need for frequent changes in the law.
Filing Deadlines
The last-date for filing income tax returns (ITR) will remain the same:
Individuals and taxpayers who do not need an audit must file their Income Tax returns by July 31 of the assessment year. Companies requiring an audit must submit their audit report by 30th September and file their IT Returns by October 31. Taxpayers involved in international transactions must submit their audit report by October 31 and file their ITR by November 30. If someone misses the deadline or needs to correct mistakes, they can file a delayed or revised return by December 31.It is to be noted that a penalty of up to Rs. 5000 may be charged for late filing as per Section 234F of the Income Tax Act.