Finance Minister Nirmala Sitharaman today tabled the much-anticipated Income Tax Bill, 2025, in the Lok Sabha, marking a decisive break from the Income Tax Act of 1961. Slated to take effect from April 1, 2026, the draft bill has been hailed by tax experts and industry leaders as a landmark reform, designed to modernise India’s tax framework, eliminate ambiguity, and enhance clarity.

The bill proposes a streamlined structure, slashing the number of chapters and sections while retaining the existing tax rates and structure.

Among its most significant features is the reorganisation of major tax exemptions into distinct schedules, an effort aimed at reducing complexity and making compliance more transparent. It also incorporates provisions to address new-age financial realities, including digital transactions, cryptocurrency, and online gaming—sectors that have grown exponentially in recent years.

A new tax era? Experts weigh in

Anil Talreja, Partner at Deloitte India, sees the bill as a "golden opportunity" to make India a more attractive investment destination. “This modernised tax system is aligned with the government’s broader economic vision. It will empower businesses, support the aspirations of India’s middle class, and fuel consumption-driven growth,” he says.

Gouri Puri, Partner at Shardul Amarchand Mangaldas & Co., notes that while the bill doesn’t introduce sweeping policy shifts, it makes crucial structural improvements. “The introduction of a single ‘tax year’ concept, replacing the ‘assessment year’ framework, brings India in line with international tax norms and enhances clarity,” she explains.

For Rohinton Sidhwa, Partner at Deloitte India, one of the biggest takeaways is the bill’s cleaner, more intuitive structure. “By removing convoluted provisos and explanations, the bill makes tax provisions more digestible. The new ‘interpretation’ section defining key terms and the use of tables to present information are significant improvements in readability,” he says.

The digital revolution’s imprint on the bill is hard to miss, notes Lokesh Shah, Partner at IndusLaw. “The word ‘digital’ appears 47 times in the bill, underscoring the growing importance of digitalisation in record-keeping, transactions, and compliance. This is a clear recognition of how rapidly India’s economy is shifting online, from cryptocurrencies to e-commerce.”

nirmala sitharaman income tax bill

Nirmala Sitharaman's New Income Tax Bill: A historic overhaul to rewrite India’s tax future, say experts