FM Sitharaman Tables Revised Income Tax Bill 2025; Promises Simplification & Relief For Taxpayers

Union Finance Minister Nirmala Sitharaman on Monday presented the revised Income Tax Bill, 2025, in the Lok Sabha, promising a simpler, fairer, and clearer tax regime for Indian taxpayers.

BJP leader Baijayant Panda, who chaired the Parliamentary Select Committee, incorporated 285 recommendations into the legislation and tabled it amid loud protests from the Opposition benches.

While introducing the Bill, Sitharaman emphasised that the revisions were essential to ensure legislative precision and avoid ambiguity.

“There are corrections in the nature of drafting, alignment of phrases, consequential changes and cross-referencing,” she explained, adding that the earlier version of the Bill was withdrawn to prevent confusion.

The updated draft now offers lawmakers a consolidated, up-to-date document reflecting all agreed changes.

The revised Bill will replace the existing Income Tax Act, 1961, which lawmakers have amended over 4,000 times and expanded to more than five lakh words.

According to Panda, this complexity has made the current law cumbersome for both taxpayers and legal practitioners.

“The new bill simplifies the tax code by nearly 50 per cent, making it far easier for ordinary taxpayers to read and understand,” Panda said.

He further added that the reforms would help reduce legal disputes and ease compliance for individuals and MSMEs.

Middle-Class Relief and Economic Boost

One of the most notable aspects of the revised legislation is the restructuring of income tax slabs and rates.

The government says these changes will provide substantial relief to the middle class, leaving more disposable income in their hands. This, in turn, will spur household consumption, savings, and investment.

Sitharaman stressed that the updated structure aims to improve fairness across all income groups while aligning with existing provisions in other financial laws.

The Parliamentary panel had flagged multiple drafting inconsistencies and recommended clearer language to prevent misinterpretation.

The government says the revised draft addresses these concerns, aligning the law with contemporary economic realities and streamlining tax administration.

With the Bill now back in Parliament, lawmakers will debate the scope of changes and their potential impact on both individual taxpayers and the business community.

Once passed, the new Income Tax Bill could mark the most significant overhaul of India’s direct tax framework in over six decades.

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