Union Cabinet likely to approve new Income Tax bill tomorrow
What's the story
The new Income Tax bill is likely to be approved in a Union Cabinet meeting tomorrow, India Today reported citing anonymous sources.
If it gets Cabinet approval, the bill could be introduced in the Lok Sabha as early as next week.
Union Finance Minister Nirmala Sitharaman had first announced plans for this legislation during her Budget 2025 presentation.
Legislative overhaul
New I-T bill aims to replace outdated 1961 Act
The new Income Tax bill will replace the archaic Income Tax Act of 1961.
Sitharaman had said "New Income Tax bill will be clear and direct," during her budget speech on February 1.
The proposed legislation will simplify terms and clauses, making it easier for taxpayers to navigate the complexities of income tax laws.
Tax reform
Simplifying tax compliance and reducing disputes
The upcoming I-T bill is expected to simplify tax compliance for individuals and businesses, and reduce legal disputes.
Sitharaman emphasized that the government's focus with this bill is not to introduce new taxes but to simplify existing laws, remove ambiguities, and ensure ease of compliance for taxpayers.
The legislation is part of the government's broader strategy to overhaul the existing tax structure and make it more streamlined and transparent.
Legislative process
New I-T bill to undergo further refinement post-introduction
Post-introduction, the new I-T bill is likely to be sent to the Standing Committee for further discussion and fine-tuning of its provisions.
Several amendments are likely to be introduced with an emphasis on reducing litigation.
One such provision could be a reduction in penalties for certain offenses, making the tax framework less punitive and more taxpayer-friendly.