New Income Tax Bill 2025 Halves Word Count, Boosts Taxpayer Compliance: Finance Committee Chairman Baijayant Jay Panda

The newly proposed Income Tax Bill 2025 aims to transform India’s tax compliance ecosystem by simplifying legal language and halving the Act’s word count, says Baijayant Jay Panda, BJP MP and Chairman of the Finance Select Committee. The bill, which does not alter existing tax rates or policies, was designed to make tax filing and compliance significantly easier for millions of taxpayers.

Addressing the media, Mr. Panda highlighted the legislative overhaul, stating, “The new draft Income Tax Bill reduces the word count of the Income Tax Act by nearly 50 percent, from approximately 5 lakh words to 2.5 lakh words. Very simple formulas and tables have been given to ensure greater simplicity.”

This initiative follows Prime Minister Narendra Modi’s longstanding effort to modernize and repeal outdated laws, with Finance Minister Nirmala Sitharaman previously announcing the goal of comprehensive income tax simplification.

The parliamentary panel, chaired by Panda, recently presented its report in Lok Sabha with detailed recommendations. The panel’s 4,584-page analysis of the Income Tax Bill 2025 identified key drafting corrections, drawing from stakeholder inputs to ensure the revised law is clear and unambiguous. Their report, tabled on Monday, contains 566 specific suggestions aimed at tightening definitions, removing ambiguities, and aligning the new legislation with India’s legal framework.

Panda emphasized, “Our mandate was not to change the tax policy or tax rates, but to make the Act more accessible and straightforward.” The simplified Income Tax Bill 2025 was first introduced in Parliament in February before being referred to the Select Committee for in-depth review.

The overhaul, described as a major step toward ‘tax compliance in India,’ supports easier tax filing and aims to foster clarity for individuals and businesses alike. With these reforms, the government seeks to provide a more transparent, taxpayer-friendly system and further India’s ongoing tax reforms under the leadership of PM Modi and Finance Minister Sitharaman.

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