New Delhi: The Finance Ministry is reportedly unlikely to introduce the new Income-Tax Bill during the Budget 2025 session of Parliament. In July 2024, Finance Minister Nirmala Sitharaman had announced a review of the Income-Tax Act, with the process being carried out by an internal committee led by Chief Income-Tax Commissioner V.K. Gupta. The committee is expected to submit its final report before the Budget presentation on February 1, 2025.
According to reports, while the committee is on track to complete its review of the Income-Tax Act, the proposed Bill will not be enacted immediately during the Budget session. Once the report is submitted, the draft legislation will be created with the assistance of the Law Ministry. Afterward, the draft will be referred to the Standing Committee on Finance for further scrutiny and feedback.
The committee, which was given a six-month timeline to complete its work by January 2025, is not expected to suggest changes to tax rates. Instead, its focus remains on simplifying the Income-Tax Act to make it more concise, user-friendly, and accessible to taxpayers. A senior government official confirmed that the committee aims to submit 23 reports, each covering a chapter of the 1961 Act, with the simplification process being the primary goal. The committee has already submitted eight reports to the Central Board of Direct Taxes (CBDT), while sub-committees work to finalize the remaining drafts.
The Income-Tax Act of 1961, which has roots dating back to 1922, contains 298 sections and 23 chapters along with numerous provisions. The upcoming revisions aim to streamline these provisions without altering tax rates, making the system more transparent and easier to understand for taxpayers.
