New Delhi, Feb 3: After providing a big relief to the Indian middle class in the Union Budget 2025-26, the government is all set to present a new Income Tax Bill this week which would further simplify the entire tax system, bringing sweeping reforms.
The current Income Tax Act was enforced in the country in 1961 and now, the new Income Tax Act is being made according to the needs of the 21st century to replace the existing law, according to sources close to the development.
While presenting the Budget in the Parliament, Finance Minister Nirmala Sitharaman said the country needs a new Income Tax regime and a bill for this would be introduced in this session — in all likelihood on February 6. A review committee was formed for the new Income Tax law in the country to replace the earlier cumbersome law.
According to sources, the new Income Tax Bill has been prepared by the government on the recommendation of the committee. In this era of technology and massive digitalisation, taxpayers can perform several things online on his or her own.
In such a scenario, there will be smooth changes in the new I-T Bill for the common man who can understand it seamlessly online. This is an attempt to make the system simple and convenient for common people, If sources are to be believed, this bill is slated to be tabled in the Parliament on February 6.
The simplification of this bill can be understood in a way that there are about 6 lakh words in the old Income Tax Act, which will be drastically reduced to about 3 lakh in the new bill, easy for taxpayers to comprehend. The government is working on simplifying the language of the new Income Tax Bill.
Actually, in the current Income Tax rules, the interpretation of one rule or the other can be different — creating confusion for taxpayers. The earlier Income Tax law has been changed so many times and with so many additions, it became more incomprehensive for the common man.
The Parliament passed the Income Tax Act, which came into force on April 1, 1962. Since then, several amendments have been made, again and again, making it all the more complicated. Now, as part of the process of its simplification, the government felt the need to create a new I-T Bill so that people could understand it easily.
If sources are to be believed, people are also afraid that after the implementation of the new Income Tax rules, the government will abolish the old tax regime. But, according to sources, no such plan is there with the government yet.
According to the government, about 78 per cent of taxpayers have already shifted to the new tax regime. Still, according to sources, the government is not in the mood to make any major changes to the old tax regime.
On the other hand, if sources are to be believed, the government is also trying to reduce people’s dependence on government schemes for investment so that people invest more in other assets, ranging from mutual funds and SIP to the stock market, which can be beneficial for people.
Along with this, the government’s intention behind giving such a big relief to the taxpayers is to increase private consumption which would directly benefit the health of the economy. -IANS
