New income tax bill to be simple to understand; Cabinet likely to discuss on Feb 7

The new income tax bill, set to be introduced in the Parliament in the coming week, will be simple to understand with no long sentences, provisos and explanations, Finance Secretary Tuhin Kanta Pandey said on Thursday.

Finance Minister Nirmala Sitharaman, in her Union Budget speech in the Parliament on February 1, said that a new Income Tax bill will be introduced soon. She added that the bill will be simpler to understand and will reduce litigation.

The new bill, which will replace the six-decade-old Income Tax Act, is likely to be discussed at the Cabinet meeting on Friday, PTI reported quoting sources.

The bill will incorporate all the tax-related changes announced in the Union Budget 2025, including income tax rates, slabs and TDS provisions.

"When you see next week a new income tax Bill, you will see a very different Bill. The way we write laws is undergoing a change. You will see very less of those long sentences you will not see probably the proviso, explanations.," Pandey said at a PHD Chambers event.

The new bill will not bring any new taxes or any new burden, Pandey added.

"We are also not changing policy in a big way. We do not want to create any unstable situation," he said.

The new law would be simple. "Laws are not supposed to be meant for only legal professionals. It is for citizens to understand," Pandey added.

The new income tax bill is expected to be concise following the removal of old provisions. It has been drafted in 6 months with efforts to simplify the language for taxpayers of the country.

FM Sitharaman made many tax-related announcements in her budget speech this month. The FM said that other than special rate income like capital gains, there will be no tax payable for taxpayers earning up to ₹12 lakh per annum under the new tax regime. This is one of the key changes announced for the middle class aiming at a consumption boost. All eyes are now on the new income tax bill and what it brings for the taxpayers.