New income tax legislation reduces sections by fifty percent; a report featuring 285 amendments will be presented in Lok Sabha on Monday.

A major overhaul of India’s tax framework is set to move forward as the report of the parliamentary committee reviewing the new Income Tax Bill, 2025 will be tabled in the Lok Sabha on Monday. The bill, which aims to replace the six-decade-old Income Tax Act, 1961, proposes a complete structural rewrite of tax law, with fewer sections, simpler language, and a new compliance framework.

The 31-member Select Committee, led by BJP leader Baijayant Panda, was set up by Lok Sabha Speaker Om Birla to examine the bill following its presentation by Finance Minister Nirmala Sitharaman on February 13. On July 16, the panel approved its report, which included 285 recommendations.

The streamlined bill aims to lessen confusion and legal disputes by employing straightforward language and an organized format. As per the FAQs released by the I-T department, the bill’s word count is 2.6 lakh — a decrease from 5.12 lakh in the current law — and it cuts the number of sections from 819 to 536. It also reduces the total chapters by fifty percent, from 47 down to 23.

The Income Tax Bill, 2025, has enlarged tabular formats to elucidate exemptions and TDS/TCS regulations — now encompassing 57 tables, an increase from 18. It removes 1,200 conditions and 900 clarifications, simplifying terminology in sectors such as non-profit organizations. In a major change for taxpayers, the legislation also suggests substituting the terms ‘assessment year’ and ‘previous year’ with a consolidated ‘tax year’. At present, taxes are paid during the assessment year for earnings from the prior year — for instance, income accrued in 2023–24 is subject to tax in 2024–25. The revised framework removes this dual reference.

When presenting the bill in Parliament, Sitharaman remarked: “Significant modifications have been incorporated into the Bill.” The word count has been cut down from 5.12 lakh, and sections decreased from 819 to 236. After its introduction, the Bill was sent to the Select Committee, which was tasked with delivering its report by the first day of the upcoming parliamentary session. The Monsoon Session of Parliament starts on July 21 and continues until August 21, 2025.