Union Finance minister Nirmala Sitharaman delivered the revised income Tax invoice, 2025, inside the Lok Sabha, replacing the profits Tax Act, 1961. the brand new draft, incorporating 285 tips from the Parliamentary select Committee chaired by bjp mp Baijayant Panda, ambitions to simplify India’s tax shape, decorate fairness, and reduce legal ambiguity. the sooner bill, tabled on february 13, 2025, changed into withdrawn due to drafting errors and stakeholder feedback.
The revised bill addresses more than one issues: it corrects phraseology, aligns provisions, and improves pass-referencing for clarity. Key provisions consist of a digital-first, faceless assessment device to streamline compliance and scale down corruption, limiting anonymous donations to basically religious trusts, and permitting penalty-loose TDS refunds put up-ITR closing dates. It also mandates tax government to issue notices before movement, fostering a taxpayer-pleasant technique.
The 1961 Act, with over four,000 amendments and 5 lakh phrases, turned into overly complex. the brand new invoice, with 536 sections and 16 schedules, simplifies language via nearly 50%, reaping rewards individual taxpayers and MSMEs by lowering litigation. Tax slabs and costs were adjusted to decrease the load at the center class, boosting consumption and savings. The Finance Act, 2025, increases the tax rebate threshold under the brand new regime from ₹7 lakh to ₹12 lakh, with a maximum rebate of ₹60,000.
The bill aligns with international pleasant practices, introducing a “tax 12 months” concept, streamlined TDS regulations, and greater CBDT powers for virtual management. by using consolidating stakeholder inputs, it goals to modernize India’s tax framework, effective from april 1, 2026, making sure clarity and performance for all taxpayers.
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