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The central government is expected to introduce the New Income Tax Bill 2025 in Parliament on February 13. The bill aims to simplify tax laws and modernize compliance rules, making it easier for taxpayers to understand the system without professional help.
Key Changes in the New Bill
The bill is quite comprehensive, covering 23 chapters, 16 schedules, and 536 clauses. Some of the major expected changes include:
Simpler Terminology:
- The term "Assessment Year" will be replaced with "Tax Year".
- The term "Previous Year" will be replaced with "Financial Year".
- This means that from now on, the Tax Year will always start on April 1 and end on March 31, making it easier to understand.
Changes for New Businesses & Income Sources:
- If someone starts a new business or profession, their first Tax Year will begin from the date of establishment and end on March 31.
- If a person gets a new source of income in the middle of a financial year, the Tax Year for that income will start from the date it begins and end on March 31.
Digital Assets as Undisclosed Income:
- The bill proposes that virtual digital assets (like cryptocurrencies) found during tax searches will now be considered as undisclosed income.
- Currently, undisclosed income includes only cash, bullion, and jewelry.
More Power to the Tax Department:
- The Central Board of Direct Taxes (CBDT) will be given more authority to create tax rules, improve compliance, and use digital monitoring tools without frequent changes in the law.
Income Tax Return (ITR) Deadlines
There are no changes to the existing ITR filing deadlines:
- July 31 → For individuals and taxpayers who don’t need audits.
- September 30 → For businesses that require audits.
- October 31 → For those dealing in international transactions.
- December 31 → For belated or revised returns.
Late filing may lead to a penalty of up to ₹5,000 under Section 234F of the Income Tax Act.
Final Thoughts
The New Income Tax Bill 2025 is expected to make tax laws simpler and more modern. While major tax rates and deadlines remain unchanged, the proposed changes could help make tax filing easier for individuals and businesses. If passed, this bill will bring greater clarity and efficiency to the Indian tax system.
