New Income Tax Bill: Here’s What Could Change For You From Next Year

The much-anticipated Income Tax Bill 2025 is expected to be introduced in the monsoon session of Parliament, beginning July 21. If passed, it could take effect from the next financial year, replacing the decades-old Income Tax Act, 1961, with a more streamlined and modern tax regime.

First tabled in Parliament on Feb. 13, the new bill focuses on simplifying the language and structure of the existing tax law.

Focus On Simplicity And Clarity

The proposed bill, with 536 sections, aims to simplify tax language, improve understanding and eliminate unnecessary cross-referencing. The existing Income Tax Act has over 5.12 lakh words and 819 sections.

The draft for the proposed bill uses active voice, shorter sentences and more accessible language, marking a major shift from the jargon-heavy structure of the existing law.

The number of chapters has also been brought down to 23 from the existing 47, making it less cumbersome for taxpayers.

Recommendations From The Select Committee

A Parliamentary Select Committee, which reviewed the draft bill, has put forward 285 suggestions. As per reports, among the notable proposed changes are:

Restoring refunds for late filing: The current draft allows tax refunds only if returns are filed on time. The committee has recommended removing this restriction to allow late filers to also claim refunds.

Bringing back Section 80M: The panel suggests reinstating the repealed Section 80M, which allows deductions on inter-corporate dividends. This is likely to benefit companies opting for the concessional tax regime under Section 115BAA.

Availability of NIL TDS certificates: As of now, the draft provides only for lower TDS certificates. The committee wants taxpayers to have access to zero TDS (Tax Deducted at Source) certificates as well, which would provide greater flexibility for those with minimal or no tax liability.

What This Means For Taxpayers

If adopted, these changes could alter how people and businesses approach income tax compliance. The proposed bill promises a simpler, more transparent tax system that's easier to navigate and potentially more equitable.

While it's still in the legislative pipeline, taxpayers should keep a close watch, especially those planning for the next assessment year. Once implemented, the new law could impact everything from filing deadlines and refund eligibility to corporate tax planning.