Lagatar24 Desk
The New Income Tax Bill 2025 is set to replace the existing Income Tax Act of 1961, aiming to simplify tax laws and make them more efficient. To help taxpayers understand the upcoming changes, the Income Tax Department has released FAQs addressing key aspects of the bill. Here are the top 10 frequently asked questions (FAQs) regarding the New Income Tax Bill 2025.
1. When was the existing Income Tax Act passed?
The Income Tax Act, 1961 was enacted in 1961 and came into effect in 1962. Over the years, it has undergone nearly 65 amendments with more than 4,000 modifications, making it one of the most complex tax legislations.
2. What is a ‘Tax Year’? What does it replace?
A ‘Tax Year’ refers to a 12-month period within a financial year, replacing the terms ‘previous year’ and ‘assessment year’ to eliminate confusion among taxpayers.
3. Can a ‘Tax Year’ be shorter than a ‘Financial Year’?
Yes, if a business is newly established during a financial year, its Tax Year will begin on the date of establishment and end on the last day of the financial year.
4. What changes have been made to Section 80G?
Section 80G has been simplified by categorizing deductions into 100% and 50% eligible deductions, making tax calculations easier. However, no policy changes have been introduced.
5. Do taxpayers need to reapply for the new tax regime if they have already opted under the old Income Tax Act (1961)?
No, taxpayers do not need to reapply. The transition will be automatic and seamless, ensuring there are no disruptions in their rights and obligations.
6. Has the due date for filing Income Tax Returns been revised?
No, return filing deadlines remain the same. However, they have been structured in a tabular format for easier reference.
7. How does the new bill compare with the old one in terms of complexity?
The new tax bill significantly reduces text and complexity:
• The old Income Tax Act had 819 sections, 47 chapters, and 512,535 words.
• The new Income Tax Bill 2025 has 536 sections, 23 chapters, and 259,676 words, making it easier to understand.
8. Why were minimal changes made to ‘Salary’ and ‘House Property’ provisions?
The bill focuses on streamlining the existing tax framework rather than a complete overhaul. Since the income from house property provisions were already widely accepted, only minor adjustments were made.
9. Will new rules and forms be required to opt for the New Tax Regime under the 2025 Bill?
Once the new law is enacted, the government will take administrative steps for its implementation. Further details on rules and forms will be released in due course.
10. Have Budget 2025 tax reforms been incorporated into the new Income Tax Bill?
Yes, the changes announced in Budget 2025, particularly new slab rates for individual taxpayers, have been incorporated into the New Income Tax Bill 2025.
