New Income Tax Bill to Be Introduced in Parliament on Tuesday: FM Nirmala Sitharaman

NEW DELHI, February 9, 2025: Finance Minister Nirmala Sitharaman is set to introduce the new Income Tax Bill in the Lok Sabha on Tuesday, marking a significant step towards overhauling India’s tax framework. The bill, which aims to simplify and streamline existing tax laws, is expected to be referred to a parliamentary standing committee for detailed examination. “I hope to have it introduced in Lok Sabha in the coming week,” said Sitharaman after the RBI board meeting. Once introduced, the bill will undergo a multi-step legislative process, starting with its referral to the standing committee for recommendations. Following the committee’s review, the bill will return to the government for Cabinet approval of any proposed amendments before it is presented again in Parliament for final passage. “Once Parliament passes it, they will decide on when best to roll it out,” Sitharaman noted.

The primary objective of the new Income Tax Bill is to simplify complex tax provisions, making them more concise and easier for both taxpayers and professionals to understand. It also seeks to modernize tax laws, reflecting changes in the economy, technological advancements, and global tax practices. By addressing ambiguities and simplifying language, the legislation aims to reduce disputes and litigation, thereby fostering a more efficient and taxpayer-friendly environment. The drafting process for the bill began in July 2024, focusing on rationalizing tax structures and making compliance easier for individuals and businesses. Earlier this week, the Cabinet gave its approval, paving the way for its formal introduction in Parliament.

Once the bill is introduced, it will be scrutinized by the standing committee, comprising experts and lawmakers who may suggest amendments to improve the draft. After incorporating the committee’s recommendations, the revised bill will be debated in Parliament before receiving final approval. The timeline for implementing the new tax law will be determined after its passage, with the possibility of aligning it with the next financial year. This development marks a pivotal moment in India’s tax reforms, with widespread expectations that the new legislation will foster a simpler, more transparent, and efficient tax system for all stakeholders.