Income-Tax Bill 2025 implementation date: Here's when the new bill will become Income-Tax Act, 2025

The Income Tax Bill 2025 tabled in the Parliament will replace the 65-year-old Income Tax Act, 1961. After final approval of the parliament, the bill will become the new Income Tax Act, 2025. However, it is going to take some some before implementation.

"The Income Tax Bill tabled in the Parliament will replace the 65-year-old Income Tax Act of 1961 (ITA) and become a new Income Tax Act of 2025. However, it will apply from 1st April 2026," said Naveen Wadhwa, vice-president, Taxmann.

"The Income Tax Bill is proposed to be effective from 1 April 2026 and would comprise of 536 sections, which are spread over 23 chapters and 16 schedules," said CA Dr Suresh Surana.

What's new

The new bill aims to simplify the existing Income-Tax Act and make it easy to understand. It contains almost 50% fewer words than the current income tax Act, yet it has retained the essence of the tax law.

"The ITB contains 2.56 lakh words, almost 50% fewer than the half a million words in the ITA. Despite the significant reduction in the legislation's size, the essence has been retained," said Wadhwa.

"Despite the significant reduction in the legislation's size, the essence has been retained," he added.

Experts say that the new bill is a a remarkable departure from the 1961 Act, which respects the legacy of the 1961 Act.

"The Income Tax Bill simplifies the structure, removes the redundant and omitted provisions of Income Tax Act, and replaces the Provisos and Explanations of ITA with sub-sections, clauses, or sub-clauses," said Wadhwa.