Union Finance Minister Nirmala Sitharaman presented the new Income Tax Bill, 2025, in Parliament, emphasizing the crucial role of digital surveillance in tackling financial frauds. The proposed bill aims to replace the 60-year-old Income Tax Act of 1961 and is expected to take effect in April 2026.
Nirmala Sitharaman Defends New Income Tax Bill, 2025, Citing Digital Surveillance as Key to Combating Financial Frauds
Simplification and Modernization
The new bill spans 622 pages and seeks to simplify the tax code by reducing the number of sections by 25-30%. It introduces a more straightforward and user-friendly language, making it easier for taxpayers to comprehend and comply with the law. The bill also reorganizes sections logically, facilitating ease of reference.
Digital Surveillance and Tax Compliance
Sitharaman highlighted the importance of digital surveillance in fighting financial frauds, emphasizing the need for a robust system to monitor and track financial transactions. The bill proposes to grant tax authorities access to bank account details, social media accounts, and digital application servers of taxpayers during searches.
Key Provisions and Changes
Some of the key provisions and changes introduced in the bill include:
– Tax Year: Replaces the terms “assessment year” and “previous year” with “tax year” to simplify language.
– Simplified Language: Uses shorter sentences, removes provisos and explanations, and deletes obsolete provisions.
– Reduced Sections: Reduces the number of sections by 25-30% to make the tax code more concise.
– New Provisions: Introduces new provisions to support startups, digital businesses, and renewable energy investments.
Impact on Taxpayers
The new bill is expected to make compliance easier for taxpayers and administrators alike, ultimately reducing tax-related litigation. However, some experts have raised concerns that the bill may be more complicated than the existing one, with more than 500 sections and 14 schedules.
Stay tuned for more updates on the new Income Tax Bill, 2025!
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