The Income Tax Bill 2025 got the nod from the union cabinet recently. The new bill is set to be presented in the Parliament on Thursday, February 13. Moreover, this bill will span over 622 pages and will replace the six-decade-old Income Tax Act of 1961. According to media reports, this will be called the Income Tax Act, 2025, and will potentially be implemented from April 2026.
Analysts and experts are criticizing the old Income Tax Act for its complexity and were demanding the change from the long-long time. CNBC-TV18 told, quoting sources, that the new Income Tax Bill will potentially propose 23 chapters and 16 schedules.
Income Tax Bill 2025: Possible BIG Updates
- The new bill might introduce ‘Tax Year’, which will define the twelve-month financial period starting from April 1, 2026, said the report.
- The proposed bill may contain over 600 pages.
- According to the report, the new bill will focus on easing compliance and the new framework will streamline paperwork, integrate digital platforms, and simplify return filing procedures, aimed at reducing the burden on taxpayers.
- The new bill will focus on the comprehensive breakdown of allowances and gratuities in the Income Tax deductions on salaries.
Recent Changes
In a significant announcement, Finance Minister Nirmala Sitharaman in Budget 2025, announced that individuals with an annual income of up to Rs 12 lakh will be exempt from paying income tax under the new tax regime. Furthermore, this exemption can go up to Rs 12.75 lakh for salaried individuals with Rs 75,000 as standard deductions under the new tax regime.
Apart from this, Finance Minister Sitharaman also introduced the new income tax slabs.
New Tax Slabs
| Income Range | Tax Rate |
|---|---|
| ₹0 to ₹4 lakh | Nil |
| ₹4 lakh to ₹8 lakh | 5% |
| ₹8 lakh to ₹12 lakh | 10% |
| ₹12 lakh to ₹16 lakh | 15% |
| ₹16 lakh to ₹20 lakh | 20% |
| ₹20 lakh to ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
ALSO READ: India’s Direct Tax Collections Surge 19.06% YoY To Rs 21.88 Lakh Crore As Of February 10
