Finance Minister Nirmala Sitharaman today presented the new Income Tax Bill, 2025 in Lok Sabha. The bill seeks to replace the six-decade-old Income Tax Act, 1961 with simplified and crisper terminology.
FM Sitharaman Tables Income Tax Bill 2025 in Lok Sabha with Less Jargon, More Clarity
To make laws concise, clear and easier to understand the word count in the Bill reduced from over five lakh in the correct Act to around 260,000 and the number of pages to 622 from 823
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On approved by the parliament upon the President's nod, the bill will come into effect from April 2026. The bill has introduced any new changes to tax rates or fundamental changes to the current regulations.
However, to make laws concise, clear and easier to understand the word count in the Bill reduced from over five lakh in the correct Act to around 260,000 and the number of pages to 622 from 823.
The bill also introduces simpler terminology such as replacing ‘Assessment Year’ with 'Tax Year' and ‘Previous Year’ with 'Financial Year'.
Sitharaman announced the I-T Bill during her Budget speech on February 1 and it was approved by the Cabinet on February 7.
After introducing the bill, Sitharaman said, "Budget for FY26 was prepared during challenging time, with serious external challenges beyond estimates or forecasts. In Budget we have kept goals of accelerating growth, encourage private investment".
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She said that short-term borrowings through T-Bills drastically reduced to ensure greater liquidity in market for private sector. The finance minister further stated that effective capital expenditure is likely to be Rs 19.08 lakh crore in the next fiscal.
"We have not cut down on sectoral allocations in the FY26 Budget. Govt managed Covid crisis and India became world's top 5th economy while we were in fragile 5 after global financial crisis," she added.
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