Income Tax Bill 2025: No new compliance training required, Finance Ministry assures

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The Income Tax Bill 2025, recently introduced in Parliament, aims to simplify the existing Income Tax Act of 1961 by reorganising its sections to make provisions clearer and more accessible. Despite initial concerns about potential requirements for new compliance training among taxpayers and professionals, the government has assured that such measures will not be necessary. This reorganisation is designed to facilitate ease of reference and offer a robust legal framework for implementing direct tax policy. "Reorganisation of sections in the Income-tax Bill, 2025 has been done to facilitate ease of reference and provide a legal framework for implementing direct tax policy that is simple, clear and unambiguous,” stated Pankaj Chaudhary, Minister of State in the Ministry of Finance, in a written reply to the Lok Sabha on March 10, 2025. 

The primary objective of the Income Tax Bill 2025 is to streamline the existing tax framework, making it more concise, lucid, and user-friendly. The government has made it clear that businesses and professionals will not be required to undergo any new compliance training due to this restructuring. Instead, the changes are expected to ease compliance for the average taxpayer. 

"This reorganisation of sections is not expected to require businesses and professionals to undergo any new compliance training. In fact, it is expected to make compliance easier for the ordinary taxpayer," Chaudhary added. This sentiment aligns with efforts to reduce the administrative burden on taxpayers while ensuring clarity in tax provisions. 

To achieve this simplification, the bill retains key terms and phrases that have been subject to court rulings, with minimal modifications to avoid ambiguity. Language throughout the bill has been simplified with short sentences, and previously complex provisos and explanations have been replaced with clearer sub-sections and clauses. Additionally, formulae and tables have been introduced to further clarify the provisions, and similar issues and definitions have been consolidated from different chapters of the existing Act. This approach not only aims to minimise the scope for multiple interpretations but also seeks to reduce the likelihood of litigation stemming from unclear tax language. 

Technological advancements, such as pre-filled Income Tax Returns (ITRs), Annual Information Statements, faceless proceedings, and e-filing, which have become integral to the tax process, have been retained in the new bill. The aim is to maintain the momentum of digital reforms that streamline tax administration. The revised bill is set to take effect from April 1, 2026, incorporating all amendments proposed up to the Finance Bill 2025. By retaining these technological reforms, the government continues its commitment to a seamless tax administration system that leverages digital innovation for taxpayer convenience. 

The changes proposed in the Income Tax Bill 2025, along with efforts to make the provisions concise and easily understandable, are anticipated to enhance taxpayer compliance. "It is expected that the changes proposed in the structure of the Bill, and efforts undertaken to make the provisions in the Bill concise, lucid, easy to read and understand (as noted above) shall act as a nudge towards increased taxpayer compliance," Chaudhary stated.