Income Tax Bill 2025: PDF Download, Chapters, Objectives, Features and Provisions

The Income Tax Bill 2025, which was introduced by the Honorable Finance Minister on Thursday the 13th of February 2025 was announced in Budget 2025 . The Bill brings with it much needed reforms and will replace the age old Income Tax Act, 1961. The Bill aims to provide for a more structured tax administration, usage of modern compliance mechanism, digital mechanism and streamlined provisions for business and individuals.

Keep reading this article to know more!

Disclaimer: The provisions of the Income Tax Bill 2025 will be applicable only after it is passed in both the houses of the parliament and is assented by the President. For now it is only a proposal and not a law.

What is the Income Tax Bill 2025?

The Income Tax Bill 2025 is the set of rules and regulations upon which the Income Tax Department levies, administers, collects and recovers taxes. It contains 536 sections, 23 chapters and 16 schedules which contain all the aspects of taxation in India. 

The Bill was introduced in the parliament on 13th February 2025. If passed, it shall be applicable from 1st April 2026.

Chapters of the Income Tax Bill 2025

The Income Tax Bill has a total of 23 chapters. Find them mentioned in the table below:

Main Objectives of Income Tax Bill 2025

The main objectives of the Income Tax Bill 2025 are as follows:

• Simplified tax provisions with clearer language: The Income Tax Bill 2025 aims to provide a more simpler tax code which is less complex, easily understandable  and much easier to interpret.
• Reduced Tax rates and increased Rebate: This Act reduces the income tax rates in order to promote higher demand for goods and services. This, in turn, leads to increased money in the hands of the taxpayer which leads to more savings. 
• Reduced legal disputes by removing ambiguities: With a streamlined tax administration and use of modern mechanisms for tax compliance, the Bill aims to reduce legal disputes and provide for a more easier redressal system.  
• Much easier compliance: With a reduction in the content, the Bills aim to make compliance more easier and efficient. This in turn will encourage more tax filings and reduced tax evasion. 

Click here to download the New Income Tax Bill, 2025

Scope of Income Tax Bill 2025

The scope or extent of tax implications under the Income Tax Bill 2025 depends upon the assessee’s residential status:

Features of Income Tax Bill 2025

Some of the salient features of the Income Tax Bill 2025 are as follows:

• Income tax is a form of direct tax that needs to be borne by the taxpayer. It cannot be transferred to another individual. 
• The Central Government of India controls this form of taxation. 
• It is applicable to the taxpayer's income which was earned in the tax year. 
• Tax calculation is applicable based on the assessee’s income tax slab. 
• The government levies a progressive income tax rate so that rich and economically powerful individuals have to pay taxes at higher rates. 
• Deductions apply to a maximum limit per financial year in certain cases. 

Provisions of The Income Tax Bill 2025

There are several provisions under the Income Tax Bill 2025, the important ones are:

• The introduction of the concept of Tax Year
• Use of modern mechanisms for compliance and a more structured tax recovery structure under Chapter XIX-D of the Bill
• Provisions related to Tax on Updated Returns are covered under section 267 of the Income Tax Bill 2025
• Procedure for Assessment
• Broader definition of Virtual Digital Asset under section 2(111)
• Consolidation of TDS provisions under one single section

Final Word

Now that you have a clear idea of the Income Tax Bill 2025, you can understand what the new Income Tax Bill 2025 is all about. Furthermore, you can take a look at the different sections in order to learn the various available deductions. This will help you make smarter investments and gain tax savings.

For a more detailed article about the difference between Income Tax Act 1961 and The Income Tax Bill 2025 click here!

Keep following our page to get more updates regarding the Income Tax Bill 2025!

Related Articles:
Income Tax Act 1961 vs Income Tax Bill 2025
Direct tax code 2025
Direct tax code vs Income tax act
New Income Tax Bill 2025 Date
Income Tax Bill 2025 FAQs