New Income Tax Bill Introduced in Parliament; All Details Here

Finance Minister Nirmala Sitharaman tabled the new Income Tax bill in the parliament, which is set to replace the Income Tax Act of 1961.

However, during the discussion some opposition members walked-out and questioned the FM. Congress' Manish Tewari and the RSP's NK Premchandran opined that the new tax bill is far more complicated than the old.

Trinamool MP Saugata Roy then criticised the new bill as being "mechanical",

Stating that the MPs were incorrect, Sithraraman said that the present law has over 800 sections while the new law had only 536.

As per a post on X, the Finance Ministry said that new tax system is built on five core principles, which is 'S.I.M.P.L.E'

The five principles are “Streamlined structure and language, Integrated and concise, Minimised litigation, Practical and transparent, Learn and adapt, and Efficient tax reforms.”

She said, “Number of words have come down by half... sections and chapters have been cut.”

The new bill was eventually put to a voice vote, following which the new proposals were passed, as expected.

FM has referred the bill to a joint parliamentary committee (JPC). The JPC is set to examine new tax proposals and implement changes, if required.

The JPC is set to submit its report on March 10. The committee will be headed by Lok Sabha Speaker Om Birla.

After tabling the bill, Ms Sitharaman's office tweeted, “The new Income Tax Bill has been tabled. The bill aims to simplify the language of the existing law as amended to date. (A copy of) the bill is available at our website... Our FAQs address common queries regarding objectives and the outcome…”

What’s there in the New Income Tax Bill?

The new law will be implemented from April 1, 2026.

Among the major changes, the terminologies of 'financial year' or ‘FY’ will be replaced with 'tax year'. The new law has also omitted redundant sections like ‘fringe benefit tax’.

Tables have also been included for provisions relating to TDS, or tax deducted at source, 'presumptive taxation', salaries, and deductions for bad debt.

In a nutshell, the new bill is set to replace the 1961 Act of Income Tax as it has become complicated and voluminous in nature due to various amendments.

While speaking this afternoon Sithrarmanan said, “The Income Tax Act was originally enacted in 1961 and came into effect in 1962.”

She reiterated, “At that time they had 298 sections. But, as time went by, more sections were added. And, as it stands today, there are 819... from that, we're bringing it down to five.”