The New Income Tax Bill, 2025, is all set to be introduced in the Lok Sabha this week. The new bill will replace the old Income Tax Act of 1961. Before the introduction of the bill, some key details from the bill's draft emerged.

Simplification In Focus

As per reports, the IT bill is oriented, and focused on simplification. This is an aspect, that the Finance Minister Nirmala Sitharaman touched upon in her budget speech on February 1.

Only Tax Year

The 622-page bill is expected to focus on the aforementioned simplification, and it is reflected in the removal of terms like 'assessment year', and 'financial year'. Instead, the term 'Tax Year' would be used.

Currently, the assessment year idea in income tax levies taxes on income received during the preceding fiscal year.

No Changes To STCG

One major development that is emerging in the matter is that there will be no changes in short-term capital gains (STCG) tax duration and rate. The duration may be retained at the current 12 months with a rate of 20 per cent.

Furthermore, bill comprises 622 pages, 23 chapters, 16 schedules, and 536 clauses, as per reports.

New Business or Profession

The new bill most likely be implemented on April 1, from the new fiscal year or FY26 (2025-26).

In addition to that, reports also suggest that the new IT bill also talks about enterprises. Here, in the case of a business or profession that has been newly set up, or a source of income, that has newly come into existence in any financial year, the tax year shall be the period beginning with— (a) the date of establishment of such business or profession; or (b) the date on which such a source of income newly comes into existence, and ending with the said fiscal year.

These new changes are being made to simplify, and thereby ease taxation, and increase compliance. It also aims to avoid any confusion, delay, and subsequent litigations.

The bill is likely to be introduced on Thursday, February 12. The ongoing budget session will conclude on April 4.