Published 11:49 IST, February 1st 2025
Budget 2025: New Income Tax Bill To Be Introduced Next Week, Says FM Nirmala Sitharaman
Budget 2025: New Income Tax Bill To Be Introduced Next Week, Says FM Nirmala Sitharaman

Budget 2025: Finance Minister Nirmala Sitharaman announced on Saturday, February 1, that a new Income Tax Bill, aimed at simplifying the existing tax laws, will be introduced in Parliament next week.
The proposed Bill seeks to significantly streamline the current Income Tax Act, which has been in place since 1961.
Sitharaman emphasized that the new legislation would make tax laws more comprehensible to the general public, reducing the complexity of the existing framework by cutting down the volume of the law by approximately 60%.
The new Bill will also prioritize clarity, aiming to use direct and simple language to ensure easier understanding for taxpayers.
"The government will introduce a new Income Tax Bill next week in Parliament to take forward the 'trust first, scrutinize later' concept. The new Bill will be half the size of the current volume and will be clear and direct in its wording," Sitharaman said in her Budget speech.
One of the key features of the new Income Tax Bill is its potential to simplify the process of calculating and filing taxes, which is expected to significantly ease the burden on taxpayers.
Sitharaman also pointed out that the new Bill would not be an amendment to the existing Income Tax Act, but rather a complete overhaul. The draft law is currently under review by the law ministry before it is formally introduced in Parliament.
This announcement builds on a promise made by the Finance Minister in July 2024, following the Lok Sabha elections, when she revealed plans to undertake a comprehensive review of the six-decade-old Income Tax Act.
Major boost for middle-class taxpayers
In a major boost for middle-class taxpayers, Finance Minister announced an increase in the tax rebate under Section 87A, guaranteeing that individuals with a net taxable income of up to Rs 12 lakh will pay no tax under the new income tax regime.
Under the proposed tax structure, individuals with annual salaries up to ₹12 lakh will pay no taxes. Previously, those earning ₹12 lakh would have to pay ₹80,000 in tax. However, under the Union Budget 2025 proposal, the tax has been reduced to ₹60,000, leaving a balance of ₹20,000. With the introduction of a tax rebate, the net tax payable for such individuals will be zero.
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Updated 15:48 IST, February 1st 2025