The proposed Income Tax Bill 2025, set to replace the six-decade-old Income-tax Act, 1961, aims to significantly simplify the language of tax legislation, reduce litigation and consolidate provisions like TDS, said PP Chaudhary, a member of the Select Committee on the Bill.
Chaudhary emphasized that the new bill is designed to be more accessible to taxpayers by removing complex terminology and streamlining provisions. "Words like 'notwithstanding' and 'without prejudice' created interpretational issues. These have now been fine-tuned or removed to ensure better clarity," he explained.
Major Reduction in Size and Complexity
Highlighting the contrast between the 1961 Act and the 2025 Bill, Chaudhary noted that the total word count has been cut nearly in half-from around 512,000 to 260,000 words. The number of sections has also been reduced from 819 to 536, and chapters from 47 to 23, making the law easier to navigate.
Over 1,200 provisions have been simplified, consolidated, or integrated, according to Chaudhary. "The tables and formulas in the bill have also been redesigned to be more user-friendly," he said, adding that TDS deductions and related processes have been consolidated to reduce confusion and improve compliance among both individuals and corporate taxpayers.
Committee Submits 4,584-Page Report
Earlier on July 21, the Select Committee on the Income Tax Bill, chaired by BJP MP Baijayant Panda, presented its exhaustive 4,584-page report in the Lok Sabha. The report, unanimously adopted by the 31-member panel, includes 566 suggestions, of which 285 focus on simplifying and clarifying the tax code.
Also Read: Lok Sabha Select Committee Submits Key Recommendations on Income Tax Bill, 2025
The committee undertook extensive consultations with stakeholders, tax experts, and industry bodies before finalising its recommendations. It has identified key drafting corrections aimed at ensuring precise interpretation and improved transparency in the application of the tax law.
A Step Toward Taxpayer-Friendly Reform
The Income Tax Bill 2025 is a major reform initiative aimed at modernising India's tax architecture in line with global best practices. By eliminating redundancies, simplifying legal language, and improving procedural efficiency, the Bill seeks to foster a more predictable and taxpayer-friendly environment.
The proposed legislation is currently under parliamentary review and is expected to be introduced for debate and passage in the coming session.
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