New Delhi, Feb 13 : Finance Minister Nirmala Sitharaman is scheduled to introduce the new Income Tax Bill in the Lok Sabha on Thursday as part of the tax reforms to streamline and simplify the provisions so that they are easier to understand and reduce the scope for legal disputes.
The Parliament’s Budget Session began at 11 a.m. The Lok Sabha, however, was adjourned till 2 p.m. amid protests by opposition members on various issues. The Finance Minister is expected to table the Income Tax bill in the Lower House later in the day.
The Income Tax Bill is being reduced to 622 pages and contains 536 clauses. It will replace the existing 64-year-old law that runs into 823 pages with 819 sections. The proposed bill seeks to simplify the language by introducing clearer terms, such as replacing ‘assessment year’ with ‘tax year’. It will eliminate various convoluted provisions and explanations to make it easier to understand and reduce the scope of legal disputes. Some archaic clauses are being dropped as part of the simplification process.
The legislation will supersede the Income Tax Act, 1961, which has grown extensively due to numerous modifications carried out over six decades. The revised tax framework is expected to come into force from April 1, 2026.
Its primary objective is to simplify the tax laws, ensuring they are more transparent, easier to interpret, and taxpayer-friendly. By replacing complex provisions with clearer provisions, it aims to reduce legal disputes and encourage voluntary tax compliance.
Once introduced in the Lok Sabha, the Bill will be sent to the Parliamentary Standing Committee on Finance for further deliberations. The new law is expected to take effect on April 1, 2026.
The bill will not change the existing tax slabs or review the tax rebate given. Instead, it aims to make the six-decade-old legislation reader-friendly.
“This reform is a significant step towards modernizing India’s tax framework, bringing greater clarity and efficiency. The bill promises a more streamlined, accessible tax system, making it easier for citizens and businesses to fulfil their obligations while fostering trust in the system,” says Rohinton Sidhwa, Partner, Deloitte India. (With inputs from IANS)