New Income Tax Bill 2025 Highlights: What taxpayers should know about Income Tax Bill as FM Nirmala Sitharaman tables it in Lok Sabha

New Income Tax Bill 2025 Live Updates: Finance Minister Nirmala Sitharaman tabled the New Income Tax Bill in Parliament today with an aim to eventually replace the Income Tax Act 1961. The New Income Tax Bill was cleared by PM Narendra Modi-led Union Cabinet last week. It features 536 clauses across 622 pages, replacing the existing 823-page law that has been in force for 64 years. According to the Lok Sabha schedule for today, the New Income Tax Bill will be tabled today. Expectations are that it will come into effect from April 1, 2026.

Will the Common Citizen Face Increased Tax Liability Under New Tax Bill?

The new tax legislation aims to maintain revenue equilibrium, with its main objective being to streamline language and ease compliance processes. Tax rates are unlikely to change under the new Income Tax law, since such adjustments usually take place via the Finance Act when the annual Union Budget is presented in Parliament on February 1. The forthcoming FY26 Budget changes will be incorporated into the new Bill.

What does the New Income Tax Act propose to do?

The new Income Tax legislation seeks to make tax laws more comprehensible and user-friendly for the general public. The government's initiative aims to cut down the length of the tax code by 50 per cent whilst using clearer language. This revision will help taxpayers better understand their responsibilities and obligations. The simplified structure is expected to minimise legal conflicts and decrease the number of disputed tax claims.

• The proposed New Income Tax Bill, written in clearer language, eliminates the concept of "assessment year" and introduces "tax year" to align with the financial year.
• It maintains existing structural elements and filing deadlines whilst focusing on improving comprehension to reduce legal disputes. Tax experts note this emphasis on clarity rather than systemic changes.
• The Bill incorporates tables for TDS provisions, presumptive tax rates and assessment timelines to enhance understanding. It includes formulae and replaces complex terminology with simpler alternatives.
• For instance, "irrespective of anything" now appears where "Notwithstanding" was previously used. The text has been modernised by removing dated and complex language.

Whilst the legislation is expected to be scrutinised by a parliamentary committee, implementation is planned for April next year. Track TOI’s live coverage on the New Income Tax Bill to know what’s in store for taxpayers: