New Income Tax Bill tabled in Parliament

New Delhi: Union Finance Minister Nirmala Sitharaman introduced the Income Tax Bill, 2025, in the Lok Sabha on Thursday and urged Speaker Om Birla to refer it to a select committee of the House.

This new bill, set to be effective from April 1, 2026, once passed, seeks to simplify the income tax law in India. It has restructured various sections under different categories such as deductions, exemptions, rebate, capital gains, and income from other sources.

Opposition members opposed the Bill at the introduction stage, but the House passed a motion by voice vote for its introduction.

While moving the Bill for introduction, Sitharaman urged Birla to refer the draft law to a select committee of the House, which will submit its report by the first day of the next session. She urged the Speaker to take a call on the proposed panel's composition and rules.

The much-anticipated Bill will replace terminologies such as "assessment year" and "previous year" with the easier-to-understand "tax year" as part of a move to simplify language while removing provisos and explanations.

Responding to the objections raised by some Opposition members at the introduction stage of the bill, the Finance minister said Manish Tewari of the Congress and N K Premchandran of the Revolutionary Socialist Party (RSP) were incorrect in stating that the new bill has more sections in comparison with the existing income tax law.

Sitharaman said that while in 1961 the present law had fewer sections, after a series of changes over the years it now has 819 sections. The proposed Act only has 536 sections. She also rejected Trinamool Congress MP Saugata Roy's contention and asserted that the bill does not have mechanical but substantial changes.

Govt will continue taking measures to ensure inflation doesn't hurt citizens: Sitharaman (Eds: Adding details)

Check on inflation

The Finance minister said the government will continue to take measures to check inflation and ensure that citizens are not burdened. Replying to the discussion on the Union Budget in the Rajya Sabha, the minister said the retail inflation based on Consumer Price Index (CPI) reduced to 4.31 per cent in January from 5.22 per cent in December and is moving towards the 4 per cent target given to the Reserve Bank of India. The House witnessed several instances of altercations between the Opposition and the treasury benches over issues like Budget allocations to Telangana, West Bengal, Tamil Nadu, and Kerala. Several Opposition parties staged walkout from the House during the minister's reply, even though Sitharaman stressed that the Modi government has never discriminated against any state.