Income Tax Bill, 2025: During the introduction of the new Income Tax Bill 2025 by Finance Minister Nirmala Sitharaman in the Lok Sabha, she emphasized that it is more than just a mechanical alteration to replace the existing Income Tax Act 1961.
Following this, she promptly requested Lok Sabha Speaker Om Birla to form a Select Committee to review the Bill. She indicated that the committee should aim to present its findings by the commencement of the next session (Monsoon Session). Amid some opposition, several MPs were witnessed walking out during the bill's introduction, though the exact number of MPs who exited the session remains uncertain.
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On being asked about the new Bill, the FM said: “The current Income-tax Act was enacted in 1961 and came into existence with effect from April 1, 1962. It has been amended nearly 65 times with more than 4,000 amendments,” she said, justifying the need for a new Bill.
Speaking on the objection raised by Opposition MP from Kerala's Kollam, NK Premachandran, on the new bill having more sections than the previous Income Tax Act from 1961, Sitharaman said, “He should understand where the law is today and where it is being reduced.”
“The Income Tax Act was originally enacted in 1961 and came into effect in 1962. At that time, they had only 298 sections…But as time went by…many more sections were added. As it stands today, there are 819 sections,” Sitharaman said. “From that 819, we're bringing it down to 536. So he should look at what it is today,” she added.
In a post on social media platform X, the Finance Ministry said the new tax system is built on five core principles, which make it 'S.I.M.P.L.E' for people to follow and enforce.
These five principles were explained as: "Streamlined structure and language, Integrated and concise, Minimised litigation, Practical and transparent, Learn and adapt, and Efficient tax reforms".
The new bill was subjected to a voice vote and although opposition members continued to express their opposition at this stage, the new income tax proposals were successfully approved. Following this, Sitharaman decided to refer the bill to a joint parliamentary committee for further review of the tax proposals and any necessary amendments before it is presented for final approval in the House.
The JPC is scheduled to deliver its findings by March 10, marking the start of the second half of the Budget Session. Lok Sabha Speaker Om Birla will be responsible for establishing this committee.
After tabling the Bill, FM Sitharaman posted on X: "The new Income Tax Bill has been tabled. The bill aims to simplify the language of the existing law as amended to date. (A copy of) the bill is available at our website... Our FAQs address common queries regarding objectives and the outcome..."