ICAI Welcomes New Income Tax Bill for Promoting Investment and Simplifying Tax Regime



Quick Summary
The Institute of Chartered Accountants of India (ICAI) has warmly received the new Income Tax Bill, which Parliament approved on Tuesday. This legislation, replacing the Income Tax Act of 1961, aims to create a simpler, clearer tax framework effective from April 1, 2026. ICAI highlighted that many of its recommendations have been incorporated, focusing on areas like Alternative Minimum Tax, refund claims, expenditure allowability, and presumptive tax rates, all designed to improve the ease of doing business and attract global investment.

The Institute of Chartered Accountants of India (ICAI) has welcomed the newly passed Income Tax Bill, describing it as a simple and clear tax framework that will enhance ease of doing business and help position India as a preferred global investment destination.

Parliament on Tuesday approved the new bill, which will replace the six-decade-old Income Tax Act, 1961 and come into effect from April 1, 2026. ICAI confirmed that the legislation incorporates a large number of recommendations from the Parliamentary Select Committee, which engaged with ICAI and other stakeholders during consultations.

New Income Tax Bill Welcomed by ICAI for Investment

According to ICAI, around 90 of its suggestions have been included in the bill. Key among them are:

  • Applicability of the Alternative Minimum Tax (AMT) only to those who have claimed specified income-based or investment-linked deductions.
  • Removal of the requirement to file a return on or before the due date solely for claiming a refund.
  • Clarification on the year of allowability of expenditure when tax deduction happens in a subsequent year.
  • Applicability of the 6% presumptive tax rate for receipts in online mode up to the due date of return filing.

"By streamlining the structure and provisions, the new bill reflects the government's commitment to providing a simple and transparent tax framework. This will significantly enhance the ease of doing business and strengthen India's appeal as a favoured investment destination," ICAI said in its statement.

The bill is being seen as a major step in modernising India's direct tax system, addressing long-standing industry demands for simplification, clarity and reduced compliance burdens.

FAQ :

The new Income Tax Bill is legislation approved by Parliament that will replace the Income Tax Act, 1961, and is set to come into effect from April 1, 2026.

ICAI has welcomed the new bill, describing it as a simple and clear tax framework that will enhance the ease of doing business and promote India as a global investment destination.

Approximately 90 of ICAI's suggestions have been incorporated into the new Income Tax Bill.

Key changes include the applicability of Alternative Minimum Tax (AMT) only to those claiming specific deductions, removal of the requirement to file a return solely for refunds, clarification on expenditure allowability, and the application of a 6% presumptive tax rate for online receipts.

The new Income Tax Bill will come into effect from April 1, 2026.




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Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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