Finance Minister Nirmala Sitharaman on Thursday introduced a new Income Tax Bill-2025 with the objective of simplification of 64-year-old Income Tax Act-1961 in the Lok Sabha and unnecessary proceeds. This bill of 622 pages includes 536 sections. While the Income Tax Act-1961 has 1647 pages and 819 streams. In this bill, it has been made easy and transparent for taxpayers by removing many old and complex provisions. The purpose of the new law is to make the process clear, easy, simple and free from legal complications to reduce the number of long -lasting disputes. The possible date for implementing it has been fixed on 1 April 2026. Certainly the new income tax law will begin a new phase of transparency and simplicity in the tax system, it is the new sun of the Income Tax Act, which will be the light of simplicity and ease in place of complications and packets.
The new income tax law is much smaller than the number of words and streams compared to the current Income Tax Act, the old Income Tax Act had 5.12 lakh words, while the new bill has only 2.6 lakh words. Different chapters of the Act have also been reduced from 47 to 23, 1,200 provisions and 900 explanations have been removed in the new law. The aim of these changes is that people can easily understand the rules of income tax and the process of filling the tax becomes easier than before. This bill is associated with a great purpose of making income tax provisions simple and easy, which can be seen in the coming years. Prime Minister Narendra Modi has been a supporter of at least laws and simple-system since the beginning.
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The economic revolution in the country is taking place on many fronts in the country towards becoming the third major economy in the world. Not only has the economy of India changed but the whole world around us has changed. In the Income Tax Act made in 1961, new amendments continued as per the changing needs, which increased its complexity. This complexity not only confused the taxpayers, but has been explaining in many ways the interpretation of the legal provisions and has been raising many controversies. As a result of these complex circumstances, the disputes over tax in their country continued to increase. Due to these ever increasing controversies, it came to be called the capital of the world’s tax disputes. Especially in the last nearly one and a half decades, this trend increased very fast. The situation came such that by 2023-24, the disputed amount in tax cases increased to Rs 15.4 lakh crore, about 87 percent of which is connected to direct tax. There are possibilities and commendable that the implementation of the new law will also reduce the disputes and the public will also breathe a sigh of relief. Surely this step is welcome. By bringing this law, the Modi government and especially the Finance Minister have followed their responsibility honestly.
The Income Tax Act-1961 is raising disputes due to the complications of 1961. While the Income Tax Department does not benefit from these disputes because its record of victory has been very bad. According to a study on tax disputes in 34 countries by the Organization for Economic Cooperation and Development (OECD), the tax department in India won only 11.5 percent of cases in 2015. The average of OECD countries is 65 percent in this case. Of course, this situation has been worrying for India. Now this situation is likely to improve. According to economic experts, the new Income Tax Act will make the tax code more simpler and it will provide relief to income tax payers along with income tax officials. Nothing better than that of income tax payers get rid of the language that is easily understood with complex rules.
Such a simple tax process in the country has been expected that any man is self -sufficient at both ground and paper levels in terms of tax. The new law is fulfilling this big expectation and paving the way for freedom from big problems. In such a situation, whether there is talk of deciding vocabulary like tax ear or keeping all the provisions related to salary deduction in one section or to bring clarity on the provisions related to farming, the proposed bill comes correctly if the proposed bill comes correctly if the proposed bill comes correctly It will strengthen the country’s tax system and will also change the resolve of new India, strong India and developed India. Since it has been decided to send the Income Tax Bill to the Parliamentary Committee, it is expected that it will help to give it a really simple look during a broad and healthy deliberations there. Along with this expectation, it should be kept in mind that there is a need to create such an environment, so that people are motivated to give income tax voluntarily and there is no fear in their mind.
It is also the demand of the hour that the government take measures to increase the number of income tax payers. This is necessary because the number of income tax payers in a country with a population of one hundred and fifty crores is less than four crore. Of these, they are the main ones who are employed. The Income Tax Department needs to be so tight and correct that those who do not give income tax despite being able to find out such people. After all, why should the affluent farmers who earn more income than a limit, should not be brought under the purview of income tax? It should not be ignored that the rule of keeping agricultural income out of the scope of tax is also being misused. Many people like to carry the disease in place of medicine for a long time, but do they not be destroyed while living? It makes sense of eating kheer and eating, but what is the meaning of cold till it is stale? The able people should be ready to voluntarily pay income tax.
The subject of income tax in the country is surrounded by controversies. Still some economists consider income tax as double and non-essential taxation. For a long time, such voices have also emerged that a common man pays tax for almost everything and service, then why does there be a need to collect income tax from him? In future, it is also expected to think positively. Another major discrepancy has been encountered by the income tax payer that the Income Tax Department sees it with doubt and doubt on every front. Therefore, as much necessary income tax regulations are to be simplified, it is expected that the Income Tax Department unnecessarily neither question and answer the people nor to harass them on any mistake. This will be possible when the Income Tax Officers stop looking at the income taxpayers with suspicion. They also have to understand that adopting measures to save income tax does not mean stealing tax. The Income Tax Department will also have to prevent the reasons, due to which people try to hide income. Along with this, such arrangements will have to be made so that there is no corruption in assessing income tax and its recovery. The Income Tax Department will have to become a consumer of the people, not a consumer of the trust of the people. Certainly the new Income Tax law will make India’s tax system modern and effective. This will make it easier for taxpayers to fulfill their responsibilities, increase confidence in the tax system and avoid legal complications.
– Fine Garg
Writer, journalist, columnist
