Income Tax Bill 2025: Tax Year and Simpler Law
Why in the news
The New Income Tax Bill, 2025 was set to be tabled in the Lok Sabha, aiming to simplify and modernise tax law by trimming complexity and repeated provisions.
Key facts
- Would replace the Income Tax Act, 1961 from April 1, 2026.
- Tax year: a 12-month year beginning in April, replacing assessment year and previous year.
- Profit-related rules are brought together in Clauses 334 to 346.
- Explanations and provisos are folded into sections and sub-sections.
- Virtual digital asset (VDA) amendments from the Finance Bill 2025 are included, bringing crypto, NFTs and similar assets under clearer tax rules.
Old versus new
| Measure | Before | Bill 2025 |
|---|---|---|
| Words | 520,000 | 260,000 |
| Pages | 823 | 622 |
Exam angle
- Act to be replaced: Income Tax Act, 1961.
- Proposed effective date: April 1, 2026.