Govt of India Withdraws Income Tax Bill 2025
Currently, the 1961 Act has over 4,000 amendments and is extremely complex, making it difficult for ordinary citizens and small businesses to understand.;
The Income Tax Bill 2025, which aimed to replace the 1961 Income Tax Act, has been officially withdrawn by the Indian government. A revised version of the bill, which incorporates key recommendations from the Parliamentary Select Committee, will be introduced in Parliament on Monday. The committee led by BJP MP Baijayant Jay Panda stated that the new bill seeks to simplify the tax structure, reducing confusion and helping taxpayers navigate the system more easily.
Currently, the 1961 Act has over 4,000 amendments and is extremely complex, making it difficult for ordinary citizens and small businesses to understand. The new bill intends to streamline the tax framework by cutting down its length by 50%, making it more accessible to the public.
This reform is expected to benefit small business owners and MSMEs, who often face challenges due to complicated tax regulations. The government plans to lower the tax burden on the middle class, increasing their disposable income to encourage spending and saving. The Finance Act, 2025, also raises the income threshold for tax rebates, offering more relief to the middle-income group. Overall, the new bill aims to simplify tax filing processes for individuals and small businesses ensuring a fairer tax system.