Income-tax Bill, 2025 introduced in Lok Sabha to replace the Income-tax Act, 1961
Finance Minister Nirmala Sitharaman introduced the Income-tax Bill, 2025 in the Lok Sabha on 13 February 2025, and it was referred to a Select Committee.
Summary
The Income-tax Bill, 2025 was introduced in the Lok Sabha on 13 February 2025 by Finance Minister Nirmala Sitharaman to simplify the language and structure of the Income-tax Act, 1961, without major policy changes or changes in tax rates. The Bill cuts the number of sections from 819 to 536, chapters from 47 to 23 and words from about 5.12 lakh to 2.6 lakh, while adding tables and formulae. It replaces 'assessment year' and 'previous year' with a single 'tax year'. The government said 20,976 online suggestions were received. On the minister's motion the Bill was referred to a 31-member Select Committee of the Lok Sabha, constituted on 14 February under BJP MP Baijayant Panda.
Key facts
- Introduced
- 13 February 2025, Lok Sabha, by Nirmala Sitharaman
- Sections
- 536 (from 819)
- Chapters
- 23 (from 47)
- New concept
- 'Tax year' replaces 'assessment year' and 'previous year'
- Referred to
- 31-member Select Committee of the Lok Sabha, chaired by Baijayant Panda
- Tax rates
- Unchanged
Practice MCQs 5 questions
How many sections did the Income-tax Bill, 2025 contain when it was introduced on 13 February 2025?
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Correct answer: C — 536
The Bill has 536 sections against 819 in the Income-tax Act, 1961, a reduction of 283 sections.
The Income-tax Bill, 2025 replaces the terms 'assessment year' and 'previous year' with:
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Correct answer: C — Tax year
The Bill replaces 'assessment year' and 'previous year' with the simpler 'tax year'.
Who was appointed chairperson of the Lok Sabha Select Committee set up to examine the Income-tax Bill, 2025?
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Correct answer: D — Baijayant Panda
The 31-member Select Committee, constituted on 14 February 2025, is chaired by BJP MP Baijayant Panda.
The Income-tax Bill, 2025 reduces the number of chapters from 47 in the 1961 Act to:
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Correct answer: D — 23
Chapters fall from 47 to 23, a reduction of 24, while tables rise from 18 to 57.
Consider the following statements about the Income-tax Bill, 2025 as introduced: 1. It made no changes to tax rates. 2. It was referred to a Joint Committee of both Houses of Parliament. 3. Over 20,000 online suggestions were received during the simplification exercise. Which of the statements given above is/are correct?
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Correct answer: C — 1 and 3 only
The Bill kept tax rates unchanged, and 20,976 online suggestions were received. It was referred to a Select Committee of the Lok Sabha, not a Joint Committee, so the second statement is wrong.