The Income Tax Bill, 2025, intended to simplify tax laws and modernize India's six-decade-old income tax framework, took an estimated 60,000 man-hours to draft, Finance Minister Nirmala Sitharaman revealed during her address at the 166th Income Tax Day celebration.
"Since 1961, the Act had not undergone a comprehensive review. Over time, layers and layers were added, making it extremely complex. Drafting the new bill took 60,000 man-hours," Sitharaman said, underscoring the scale of the legislative overhaul.
A Long-Awaited Reform to Replace the Income Tax Act, 1961
The Income Tax Bill, 2025, introduced in February 2025 in the Lok Sabha, seeks to replace the Income-tax Act, 1961, which had become riddled with amendments and ambiguities over the years. The bill has already gone through an extensive review by a select parliamentary committee, which submitted 566 observations and recommendations in its 4,000-page report.
Legal Jargon Simplified, Sections Streamlined
Sitharaman praised the Central Board of Direct Taxes (CBDT) for their meticulous effort in simplifying legal language and reducing the bill's overall complexity.
"I appreciate the CBDT for reducing the number of words, simplifying legal jargon, and ensuring clear sectioning so that interpretation becomes easier for all stakeholders," she said.
The Bill drastically reduces the word count and number of sections, making it more accessible for individual taxpayers, professionals, and corporate entities alike. Officials are now engaged in drafting the rules and forms that will govern how the law functions in practice.
Focus on Timely Implementation and Citizen Trust
During her speech, Sitharaman also issued a strong message to tax officials regarding delays in issuing Orders Giving Effect (OGEs)-the legal orders required to implement favourable rulings for taxpayers.
"The delay in OGE issuance is just not explainable... unpardonable," she said, referencing a November 2024 CAG report that exposed delays of up to 11 years in certain cases.
She emphasized the importance of strict internal protocols to avoid bureaucratic inefficiencies and to restore public confidence in the tax administration.
Five Priorities for Tax Administration
The Finance Minister outlined five key operational goals for the Income Tax Department:
- Speedy disposal of pending tax demands
- Timely issuance of tax refunds
- Withdrawal of minor and low-value appeals
- Prompt redressal of taxpayer grievances
- Enhanced regional performance monitoring
She urged tax officers to align with these priorities to build a more efficient, transparent, and taxpayer-friendly ecosystem in line with the government's "Viksit Bharat" vision.
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