Simplified language, new tax year concept part of Income-Tax Bill, 2025

At present, income taxation has the conception of appraisal twelvemonth which assesses taxation connected income earned successful the erstwhile fiscal year. For instance, income earned successful fiscal twelvemonth 2024-25 (April 1, 2024 to March 31, 2025) volition beryllium assessed successful appraisal twelvemonth 2025-26 (beginning April 1, 2025).

The alteration successful terminology mightiness physique basal for a much fluid income taxation reporting authorities successful the coming years, experts said.

As the caller Income-Tax Bill has much simplified language, this has resulted successful in a simplification successful the magnitude of authorities from 823 pages to 622 pages. Even arsenic the fig of chapters stay the aforesaid astatine 23 chapters successful some caller Income-Tax Bill, 2025 and the aged Income-tax Act, 1961, the sections person accrued to 536 sections from 298 sections and schedules person accrued to 16 from 14 schedules astatine present.

Virtual integer assets person been included successful the provisions for searches to number it arsenic portion of immoderate undisclosed income on with existing categories of money, bullion, jewellery.

The assorted explanations and provisos successful the existent Income-tax Act person been removed from the caller Income-Tax Bill.

There are caller sections covering gross designation for work contracts, valuation of inventory astatine little of outgo oregon nett realisable value.

Sandeep Jhunjhunwala, M&A Tax Partner astatine Nangia Andersen LLP said income not forming portion of full income person present been moved to schedules to simplify the statute. “Deductions from salaries specified arsenic modular deduction, gratuity, permission encashment etc, person present been tabulated astatine 1 place, alternatively of being scattered implicit antithetic sections and rules,” helium said.

The caller Income-Tax Bill was cleared by the Cabinet connected Friday. It volition beryllium introduced successful Lok Sabha this week, aft which it volition beryllium referred to a parliamentary committee. The committee volition springiness its recommendations, it volition past travel backmost and the authorities done the Cabinet volition instrumentality a telephone connected whether these amendments volition beryllium included oregon much request to beryllium added. After this, the Bill volition instrumentality to the Parliament, and past the authorities volition instrumentality a telephone connected its rollout date.

In October past year, the Income Tax section had announced the enactment of an interior committee to reappraisal the Income-tax Act and invited nationalist inputs and suggestions connected 4 cardinal areas — simplification of language, litigation reduction, compliance reduction, and obsolete provisions. It had past received astir 6,500 inputs and suggestions from the public.

Before this, the authorities has attempted to simplify the Income-tax Act respective times. In 2018, a task unit was formed to draught a caller nonstop taxation instrumentality that submitted its study successful 2019.

Direct Taxes Code (DTC) was earlier projected by the UPA I government, a draught Bill was enactment up successful August 2009 and it was tabled successful Parliament successful 2010. The Bill, aft reappraisal by the Standing Committee, was past revised twice, successful 2012 and 2014, but lapsed with the dissolution of the 15th Lok Sabha.