Nirmala Sitharaman introduced the new Income Tax Bill in the parliament on Thursday following cabinet approval. India's tax system would be made simpler and more contemporary by the bill, which will replace the Income Tax Act of 1961.
Speaker Om Birla was persuaded by Sitharaman to send it to a House select committee. Despite opposition to the Bill during its introduction, the House approved a move to introduce it by voice vote.
Sitharaman urged Birla to send the draft bill to a House select committee, which will report by the first day of the next session, while he was proposing the Bill for introduction. She asked the speaker to make a decision regarding the guidelines and makeup of the proposed panel.
Additionally, it will make the legal jargon easier to understand for taxpayers.
No new taxes will be imposed under the bill. The finance secretary has previously stated that it will instead concentrate on streamlining tax legislation, lowering legal complications, and making it simpler for taxpayers to comply.
It will contain fewer provisos, explanations, and sentences. Additionally, according to the administration, the new law will be 50% shorter than the existing one. Reducing lawsuits is another important objective.
The law might make the tax system more taxpayer-friendly by lowering the penalties for some offenses.
There are 23 chapters and 298 provisions in the present Income Tax Act.It has rules governing gift taxes, corporation taxes, securities transaction taxes, and personal income taxes.
It is anticipated that the new law would not include any unnecessary revisions or sections and will use plain language that the general public can comprehend without expert tax advice.
The new tax structure will go into effect in the fiscal year 2025–2026 if the measure is approved. Taxpayers from the assessment year 2026–2027 will be covered.