A significant overhaul of India’s tax regulation is about to maneuver ahead because the report of the parliamentary committee scrutinising the brand new Revenue Tax Invoice, 2025 will probably be tabled within the Lok Sabha on Monday. The invoice seeks to exchange the six-decade-old Revenue Tax Act, 1961 with a simplified framework geared toward readability, lowered litigation, and streamlined compliance.
The 31-member Choose Committee, chaired by BJP chief Baijayant Panda, was appointed by Lok Sabha Speaker Om Birla after the Invoice was launched by Finance Minister Nirmala Sitharaman on February 13 within the Lok Sabha. The committee adopted its report at a gathering held on July 16, and it’ll now be tabled within the Home for additional motion.
The Committee has made 285 strategies to the draft Invoice. It was mandated to submit its report by the primary day of the subsequent session, which begins with the Monsoon Session on July 21 and runs via August 21, 2025.
The Revenue Tax Invoice, 2025, in keeping with FAQs issued by the Revenue Tax Division, is about half the scale of the present Act, with a phrase rely of two.6 lakh, down from 5.12 lakh within the 1961 regulation. The variety of sections has been introduced all the way down to 536 from 819, and the variety of chapters halved to 23 from 47.
A key goal of the draft is to realize tax certainty by minimising the scope of litigation and recent interpretation. The brand new Invoice additionally introduces 57 tables, in comparison with simply 18 within the present Act, and removes 1,200 provisos and 900 explanations to simplify and declutter the regulation.
“Substantial adjustments have been made within the Invoice. The variety of phrases have been halved from 5.12 lakh, and sections lowered from 819 to 236,” Sitharaman had stated whereas introducing the Invoice.
The federal government stated this rewriting of the tax code makes use of plain language all through and presents provisions associated to exemptions and TDS/TCS in tabular format, making them simpler to grasp. The chapter for not-for-profit organisations has been made complete and up to date for readability. Because of these adjustments, the phrase rely has come down by 34,547, the I-T division famous.
In a transfer geared toward bettering taxpayer understanding, the Invoice replaces the time period ‘earlier 12 months’ from the previous Act with ‘tax 12 months’, and in addition does away with the idea of evaluation 12 months. Presently, tax is paid within the evaluation 12 months following the earlier 12 months wherein earnings is earned — for instance, earnings earned in 2023–24 is assessed in 2024–25. The simplified regulation will now apply taxation to the identical tax 12 months, eliminating this twin construction.
