6 days ago
Lok Sabha passes Income Tax (No 2) Bill: All you need to know about new ‘SIMPLE' law
Income Tax Bill 2025: The Lok Sabha on Monday passed two important legislations pertaining to taxation — Income-Tax (No 2) Bill and Taxation Laws (Amendment) Bill. Of these, the Income Tax (No.2) Bill 2025 seeks to consolidate and amend the law relating to Income Tax Act 1961. The Bill will now go to the Rajya Sabha for approval and thereafter to the President for assent. It will become law once the Presidential assent is provided.
The Income Tax (No.2) Bill 2025 will replace the Income Tax Act, 1961. Earlier in February, Finance Ministry said that the new bill reflects the government's commitment to enhance ease of doing business by providing a tax framework that is simple and clear.
It further added that the new bill aims to simplify the tax system for all and is built on these core 'SIMPLE' principles:
The new Income Tax bill has been designed so that one can easily understand tax laws. The provisions will be rewritten in plain, easy-to-understand language.
The Income-Tax Bill, 2025 has been introduced in the Lok Sabha today.
The Bill aims to simplify the tax system for all and is built on these core 'SIMPLE' principles:⬇️
— Income Tax India (@IncomeTaxIndia) February 13, 2025
There should be no more confusion. The new bill will be a single, well-structured act that consolidates all related provisions. The volume is reduced without losing the spirit.
The new Income Tax bill will provide more clarity with fewer tax disputes. The FAQs, guidance notes and explanations will further prevent multiple interpretations.
The new law will make taxation easier to understand. It will eliminate redundant provisions and simplifies cross-references. It uses tables and structured formats for better clarity.
The new Income Tax bill is a balanced and provide future-ready reforms. It will adopt global best practices from various tax jurisdictions. It will keep the country's core tax principles intact.
The new law will ensure reforms that don't disturb settled tax policies. It focuses on improving efficiency.
The Income Tax (No 2) Bill streamlines TDS, exemptions and other compliance-heavy provisions. It also allows individuals to claim refunds without penalty on delayed filings. It provides for 'nil' TCS on Liberalised Remittance Scheme (LRS) remittances for education purposes financed by any financial institutions, reports PTI.
