New Income Tax Bill: Government Aims to Simplify Tax System - The Union Cabinet approved the new Income Tax Bill on February 7. Now, it is expected to be presented in the Lok Sabha either today or later this week. Finance Minister Nirmala Sitharaman will respond to the Budget 2025 discussion today, and the new tax bill may be introduced soon after. Once passed in the Lok Sabha, it will move to the Rajya Sabha for approval.

What Is the New Income Tax Bill?

This bill is meant to replace the Income Tax Act of 1961. The government wants to make tax rules easier to understand so that people don’t need professional help to file taxes. The bill will be 50% shorter than the old law and use simpler language. The goal is to reduce legal disputes and make tax laws clearer for everyone. Unnecessary sections will be removed to avoid confusion.

Why Is This Change Important?

For over 60 years, many changes have been made to the tax law, making it difficult to understand. Tax experts say the current law has too many complex terms, cross-references, and explanations that cause confusion. Some outdated sections still exist, making the law harder to read.

Sitharaman announced in the Union Budget 2024 that the government is reviewing the tax law and aims to implement the changes within six months. By October 2024, more than 6,500 suggestions had been received from experts and the public. The new bill is expected to bring much-needed clarity to the tax system.