Modi cabinet approves new income tax bill, will be presented in parliament next week: The Union Cabinet i.e. Modi Cabinet has approved the new Income Tax Bill. According to sources, this new Income Tax Bill is going to be presented in Parliament for approval next week and after that it will be sent to the Financial Standing Committee. After getting approval in Parliament, this bill will replace the six-decade-old IT Act. The new bill will be free from all those amendments and sections related to income tax which are no longer relevant. Also, the language will be such that people can understand it without the help of a tax expert. This bill will not have provisions and clarifications or difficult sentences. This will also help in reducing litigation and thus reduce disputed tax demand.
No new tax burden
Let us tell you that the purpose of this new income tax law being brought by the Modi government is to bring many important changes. Its purpose is to make the direct tax law easy to understand and not to put any new tax burden on the taxpayers. No new tax burden is to be put. Stakeholders from various sectors are eagerly waiting for the provisions of the new income tax as it will simplify many tax-related issues.
Now it will be presented in Parliament
Sources said that the Cabinet headed by Prime Minister Narendra Modi has approved the new bill. Now the new bill will be introduced in Parliament next week and it will be sent to the Standing Committee on Finance of Parliament. The first phase of the current budget session of Parliament is ending on February 13. The session will resume on March 10 and will run till April 4. Finance Minister Nirmala Sitharaman had announced in the Budget 2025-26 on February 2 that this bill would be introduced in Parliament.
Establishment of Internal Committee
Let us tell you that while presenting the first budget of Modi's third term, the Finance Minister had announced a review of the Income Tax Act, 1961 in July 2024. After this, the CBDT set up an internal committee to review the Income Tax Act, 1961 and make the bill shorter, clearer and easier to understand. 22 additional sub-committees were also formed to review all aspects of the new Income Tax Act.
Why was the new bill needed?
Actually, the Income Tax Law was made about 60 years ago in 1961 and since then there have been many changes in society, the way people earn money and the way companies do business. Amendments were made to the Income Tax Act over time. Given the technological advancement and changes in the socio-economic fabric of the country, there is a dire need to completely replace the old Income Tax Act.
There will also be a change in the tax slab
The purpose of implementing the new bill is to simplify the language and compliance processes. That is to say, there is no possibility of a change in the income tax slab in the new law, as it is usually done through the Finance Act. Let us tell you that in the year 2010, the 'Direct Tax Code Bill, 2010' was introduced in the Parliament. It was sent to the Standing Committee for scrutiny. However, due to the change of government in 2014, the bill was repealed.