New Income Tax Bill 2025: 23 Chapters, 16 Schedules and Major Changes Explained

New Income Tax Bill 2025: The Indian government is preparing to introduce the New Income Tax Bill in Parliament on February 13, 2025. This proposed law aims to replace the Income Tax Act of 1961, which has been in place for over six decades. The bill will include 23 chapters and 16 schedules, simplifying tax compliance for individuals and businesses.

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Simplified Tax Terms & Definitions

One of the major updates in the new bill is the introduction of simpler terms. The term "Tax Year" will replace the existing "Assessment Year", while "Financial Year" will take over from "Previous Year." These changes aim to make tax filing easier for everyone.

Focus on Digital Transactions & Compliance

The new law will modernize tax regulations by incorporating digital transactions, electronic records, and crypto-assets into its framework. Additionally, the bill proposes to streamline compliance procedures by reducing paperwork, integrating digital platforms, and simplifying tax return filing.

Introduction of Taxpayer’s Charter

A key highlight of the bill is the introduction of a Taxpayer’s Charter, which aims to protect taxpayers' rights and ensure transparency in tax administration. It also suggests defining foreign companies as residents under certain conditions.

Making India’s Tax System More Efficient

Experts have long argued that the existing tax law is complex and often leads to legal disputes. The new bill aims to bring clarity, reduce ambiguities, and create a more taxpayer-friendly system.

Once passed, the new law will be officially known as the Income Tax Act, 2025, bringing in a more modern and structured approach to taxation in India.

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