Parliament passes Income Tax Bill, 2025; no new taxes in the bill, says FM

Parliament today passed the revised Income Tax Bill, 2025, which aims at simplifying the Income Tax Act, 1961, thereby facilitating compliance. Both Income Tax Bill, 2025, and The Taxation Laws (Amendment) Bill, 2025, introduced in the Rajya Sabha today, were passed by the house. The Lok Sabha had cleared the bills on Monday.

“The bill aims to make the language simpler. No new rate is being introduced,” finance minister Nirmala Sitharaman said in the Rajya Sabha.

“To remove confusion, I want to say that the aim of bringing in this new law is for simplifying the language and lucidity which is required for understanding,” Sitharaman added.

“FM said by removing redundant provisions and archaic language, the number of Sections have been reduced from 819 to just 536. “We have cut the number of Chapters from 47 to 23. The number of words have been reduced from 5.12 lakhs to 2.6 lakhs. For first time, we have introduced 39 new tables and 40 new formulae to replace dense text, using modern, structured formats to enhance clarity,” she added.

“These changes are not merely superficial, they reflect a new, simplified approach to tax administration. This leaner and more focused law is designed to make it easy to read, understand and implement,” Sitharaman said.

It may be noted that the bill which was introduced in February this year post an announcement in the budget regarding the overhaul of the Income Tax Act, 1961, it was later referred to a Select Committee of the Lok Sabha.

“I must thank and put on record my gratitude to the Select Committee - under the chairmanship of hon’ble MP (LS) Baijayant Panda and members from all political parties - for putting in extensive work. They consulted and met with domain and tax experts all across the country and took intensive inputs,” FM said in the house.

“The Committee, comprising 31 Members from across the political spectrum, held 36 meetings, engaging extensively with Government officials, stakeholders and experts, and received 334 memoranda containing a wealth of valuable inputs and suggestions. The Select Committee, in its report submitted to the Hon’ble Speaker of Lok Sabha, has put forward a total of 566 recommendations. Of these, the Committee agreed to department’s views and have accepted the clause as proposed in 370 cases,” she added.