New Income Tax Bill To Replace 1961 Act: Parliamentary Committee Report To Be Tabled In Lok Sabha Tomorrow

A parliamentary select committee, set up to review the Income Tax Bill, 2025, is scheduled to table its report in the Lok Sabha on Monday (21 July), The New Indian Express has reported.

The bill aims to overhaul the six-decade-old Income Tax Act of 1961 with a streamlined, modern alternative.

The 31-member committee, chaired by BJP MP Baijayant Panda, was appointed by Lok Sabha Speaker Om Birla to examine the bill introduced by Finance Minister Nirmala Sitharaman on 13 February.

In its 16 July meeting, the panel adopted the final report, which contains 285 suggestions for the proposed legislation.

Simplifying India’s Tax Landscape

The new Income Tax Bill is significantly shorter and simpler than the 1961 Act. It has 2.6 lakh words compared to the previous 5.12 lakh and includes 536 sections, down from 819.

The number of chapters has been halved from 47 to 23, and 1,200 provisos and 900 explanations have been eliminated to reduce complexity.

The Bill also includes 57 tables , which is up from 18 in the existing Act , to clarify Tax Deducted at Source (TDS)/ Tax Collected at Source(TCS) provisions and exemptions, many of which are now presented in tabular format.

According to the Income Tax (I -T) Department, the restructuring has trimmed 34,547 words and adopted plain language, especially for chapters related to not-for-profit organisations.

Key Structural Changes

One of the biggest reforms is the removal of the 'assessment year' concept.

Under the current system, income earned in one financial year (the ‘previous year’) is taxed in the following assessment year.

The new Bill proposes a shift to a single 'tax year', aiming to simplify compliance and reduce confusion.

Finance Minister Sitharaman had described the draft as a major overhaul, stating that it would bring "substantial changes" to make tax laws more accessible and transparent.

Committee Report Due as Monsoon Session Begins

The bill was referred to the select committee immediately after its introduction. As mandated, the committee will submit its report on the first day of the Monsoon Session, which will run from 21 July to 21 August.

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