Finance Minister Nirmala Sitharaman has revealed a new tax bill during her budget speech, and it has received the green light from the Union Cabinet. This means the bill could be presented in Parliament at any time now. So, what does this bill mean for you, and how might it impact your income tax? Let’s dive into the key questions surrounding this significant legislation.
When did the Finance Minister say a new Income Tax Bill would be introduced?
While unveiling the Union Budget for the financial year 2025-26 on February 1, Finance Minister Nirmala Sitharaman mentioned that the government plans to roll out a new income tax bill the following week. Since then, the Union Cabinet has also approved it, paving the way for its introduction in Parliament soon.
Why is there a need for a new income tax bill?
The goal of the new bill is to streamline income tax laws and cut down on legal disputes. It will replace the outdated Income Tax Act of 1961, making the tax system clearer and more user-friendly for taxpayers. The current act has been around for over 60 years and has seen numerous amendments, but the government believes it’s time for a fresh start rather than just more tweaks.
The existing Income Tax Act consists of 298 sections and 23 chapters, addressing various aspects like personal income tax, corporate tax, securities transaction tax, and gift tax. The upcoming Income Tax Bill aims to simplify these provisions, retaining only the essential sections. Its primary goal is to make tax compliance easier and cut down on unnecessary legal complexities. Additionally, the new bill will replace complicated jargon with straightforward language, ensuring that everyday people can grasp the key provisions without needing a tax expert’s assistance.
Will the new income tax bill raise taxes?
Many taxpayers are concerned about whether their tax obligations will increase with the new Income Tax Bill. However, there’s no need for alarm. Finance Secretary Tuhin Kant Pandey has confirmed that there won’t be any significant changes to tax rates or brackets in the new bill.
This legislation is designed solely to streamline tax compliance and minimize disputes. The government recognizes that the current tax laws are overly complex, leading to frequent misunderstandings between taxpayers and the tax authorities. The new bill aims to lessen these conflicts and simplify the tax process for everyone.
How will the new income tax bill become law?
The new Income Tax Bill received approval from the Union Cabinet in early February. According to reports, it will soon be presented in Parliament. Once introduced, it will go to the Standing Committee on Finance for thorough discussion. If the committee gives its nod, the bill will be passed in both houses of Parliament and then sent to the President for approval. Once the President signs off, this bill will officially become the new Income Tax Law in the country.