According to the new notification, three percent interest will be charged if the full amount is not deposited by the due date. As per the existing rules, now a minimum of three months’ interest will have to be paid. This reform clarifies the provisions of the Income Tax (No. 2) Bill, 2025, which replaces the Income Tax Act of 1961.

The Finance Ministry on Tuesday issued a correction notification changing the provision for interest recovery on underpayment of advance tax under the new Income Tax Bill. After this change, the calculation of interest on delay in advance tax payment will be in accordance with the provisions of the current Income Tax Act, 1961.

Provision of 3% interest recovery

According to the new notification issued by the government, if a taxpayer does not deposit the full amount of advance tax by the due date, then three percent interest will be charged on it. This interest will be applicable on the amount underpaid and it will be calculated on the basis of the due date of the respective quarter.

Existing rules for payment of advance tax

As per the current rules, taxpayers who owe tax of Rs 10,000 or more are required to pay advance tax in four installments. The dates for these installments are June 15, September 15, December 15 and March 15. If the taxpayer pays less than the prescribed amount on any of these dates, interest becomes payable.

Old provision in the bill passed in Lok Sabha

The Income Tax (No. 2) Bill, 2025, passed in the Lok Sabha on Monday, earlier had a provision that if the taxpayer makes the short payment on the next day of the quarterly due date, then only one per cent interest for one month would be charged. This provision was different from the existing tax law and was creating confusion.

Clarity provided by reform notification

According to Sandeep Jhunjhunwala, partner at consultancy firm Nangia Andersen LLP, the amendment notification has been issued to bring the old provision in line with the current law. Now it is clear that if the advance tax shortfall is made good even a day before the due date, a minimum of three months’ interest will have to be paid.

Sweeping changes to the new law

The Income Tax (No. 2) Bill, 2025 will completely replace the six-decade-old Income Tax Act, 1961, when it comes into force. The new law will be simplified and more understandable by reducing the number of chapters and sections.

The post Advance Tax Interest Rules Updated: Key Changes Every Taxpayer Must Know first appeared on Rightsofemployees.com.

The central government has also included the tax exemptions and essential facilities given in the National Pension Scheme (NPS) in the newly launched Unified Pension Scheme (UPS). For this, necessary amendments have been included in the new Income Tax Bill-2025 (No. 2). Under this, now 60% of the lump sum amount received at the time of retirement in UPS will also be tax free.

These amendments will come into effect from the financial year 2025-26. This change will specifically apply to those central government employees who opt to shift from NPS to UPS before 30 September 2025. The new provisions have been incorporated in Section-10 (Subsections 12A, 12B and 12AB) of the Income Tax Act.

Apart from this, a new subsection (6) has also been added to section 80CCD of the Income Tax Act. It is worth noting that UPS was implemented from 1 April 2025. This step was taken after the demand of employee unions across the country, in which it was said to restore the system of giving fixed pension like the Old Pension Scheme (OPS).

Tax experts say that this move will provide the same tax benefits to employees opting for UPS as are already available in NPS. This will give them more financial benefits at the time of retirement.

No restoration of OPS

With this, the government has again clarified that there is no proposal under consideration to restore the Old Pension Scheme (OPS) for central employees. Finance Minister Nirmala Sitharaman gave this information in response to a question in the Lok Sabha.

Along with this, while explaining the reason behind closing OPS, he said that the old pension scheme had an unbearable fiscal liability on the government treasury, due to which the government distanced itself from OPS and implemented NPS.

These changes were incorporated in UPS

1. Tax-free withdrawals on retirement

Employees covered under UPS can withdraw up to 60% of their pension corpus in lump sum at the time of retirement, voluntary retirement or superannuation (retirement at a specified age). No income tax will be payable on this. This system is also applicable in NPS.

2. Lump sum on superannuation

At the time of superannuation, the member will receive 10% of his monthly salary (basic pay + dearness allowance) for every six months of eligible service as a lump sum. This too will be tax free. This payment will not reduce his assured monthly pension.

3. Tax on early withdrawal

If an employee or his nominee withdraws money from the UPS account before retirement or superannuation, the entire amount withdrawn will be treated as income and taxable in the same financial year.

4. Exit the plan or close the account

If a member closes the UPS account or exits the scheme before retirement, the entire amount withdrawn (including interest and investment earnings) will be taxable in full that year.

5. Transferring funds to purchase pension

At the time of retirement, if the balance amount is invested in a ‘pooled corpus’ to purchase a pension plan (annuity), it will not be taxable.

6. Rules at the age of 60

When the member turns 60 years old, he can withdraw 60% of the pension fund tax free. The remaining 40% will have to be used to buy a pension plan (annuity).

The post New Income Tax Bill: UPS to Get Tax Benefits Like NPS, But No Return of OPS first appeared on Rightsofemployees.com.

If this proposal becomes law, then people will be able to avail tax exemption on lump sum pension withdrawal as well.

The government is preparing to bring a big relief to those who invest in private pension schemes. A special committee of the Lok Sabha has recommended making the tax rules on lump sum pension withdrawal equal for all in the new Income Tax Bill. Earlier, only government and some private sector employees used to get tax exemption on this, while non-working people who invested on their own did not get any exemption. The committee has proposed to remove this difference.

What was the difference from the existing rules?

According to the system till now, employees of the central or state government and the army were completely exempted from tax on the lump sum pension amount received on retirement. Some employees of the private sector were given partial exemption.

If they have received gratuity, then on one-third amount, otherwise on half amount. However, those who have invested in recognized private pension schemes like LIC on their own (such as self-employed or freelancers), had to pay tax on the entire amount on withdrawing the lump sum pension. The committee has not considered this inequality to be right.

Who will get the benefit?

If this proposal becomes law, the following people will be able to avail tax exemption on lump sum pension withdrawal as well…

Self-employed professionals: Such as doctors, lawyers, artists or freelancers who have invested in a recognised pension fund on their own.

Such private sector employees whose company does not have any pension scheme, but they themselves have invested money in an approved pension scheme.

Legal heir or nominee: In case of death of the pension account holder, the lump sum amount received by his dependents or nominee will also be eligible for exemption.

Beneficiaries of group insurance pension: Those who are not direct employees of an organisation but receive benefits from its approved pension fund.

What is lump sum pension withdrawal?

Lump sum pension withdrawal (commuted pension) means that at the time of retirement a person can take a part of his total pension amount immediately as a large sum. The remaining part continues to be received as regular pension every month. Before the new rule, most people had to pay full tax on this large sum received immediately.

What does the government say?

The government believes that this change will reduce the tax burden on more people who are retiring. This will increase people’s savings and their financial security will also improve after retirement. Financial experts also believe that this step will bring uniformity in tax rules between government and private sector employees.

Other proposed changes in the Bill

Apart from this, the committee has also recommended improvements in some other rules related to income tax…

Relaxation in ITR requirement: Now it will not be necessary to file a full ITR just for TDS (tax deducted at source) refund. Instead, it is proposed to fill a simple form.

Refund even on late filing of returns: According to the first proposal, there was no refund on filing returns after a certain deadline. The committee has recommended changes in this so that those who file returns late can also get a refund.

Zero TDS Certificate: Taxpayers will be able to get the facility of getting a Zero TDS certificate even before the tax is deducted, so that no tax will be deducted on their income.

New Income Tax Bill will be presented in Lok Sabha today

Finance Minister Nirmala Sitharaman will introduce this new Income Tax Bill in the Lok Sabha. The Lok Sabha Select Committee headed by BJP member Baijayant Panda gave 285 suggestions on the Income Tax Bill, which were accepted by the government. If this bill is passed, this change can bring financial relief to millions of people investing in private pension schemes.

The post New Income Tax Bill: Preparations to Implement Tax Exemption in private Pension Schemes first appeared on Rightsofemployees.com.

If everything goes well, the Income Tax Bill, 2025 will be introduced in the House next week. Union Finance Minister Nirmala Sitharaman may introduce the much-awaited Income Tax Bill, 2025 in Parliament on August 11. This bill will replace the six-decade-old Income Tax Act, 1961.

The bill was introduced in February

Let us tell you that the new Income Tax Bill 2025 was introduced in Parliament on February 13. Later it was sent to the committee which submitted its report on July 21. The Select Committee has given many important suggestions while presenting its report in the Lok Sabha.

What are the important tips

– The Committee recommended that taxpayers be allowed to claim TDS refund even after the last date of filing ITR without paying any penalty. Regarding the withdrawal of TDS refund claims of persons who are not normally required to file tax returns, the Committee recommended that the provision in the Income Tax Bill, which makes it mandatory for a taxpayer to file income tax return within the due date, should be deleted.

-Anonymous donations given to religious and charitable trusts should be kept free from taxation.

-The Committee appreciated the move by the tax department to replace the dual concepts of ‘previous year’ and ‘assessment year’ with a single term ‘tax year’ in the new tax law.

– The committee has said that the profession of company secretary should not be included in the definition of ‘accountant’. The main reason for this decision is that the draft of Income Tax Bill 2025 has been prepared with the aim of simplifying the provisions of the Income Tax Act 1961.

However, the Income Tax Department has also clarified that there is no proposal to change any tax rate in the new Income Tax Bill. The Income Tax Department said- It is clarified that the purpose of the Income Tax Bill, 2025 is to simplify the language and remove unnecessary or obsolete provisions.

The post Taxpayers Alert! New Income Tax Bill May Be Presented on August 11– Key Highlights Expected first appeared on Rightsofemployees.com.

The new income tax bill can be tabled in Parliament on 11 August 2025 by the government. Finance Minister Nirmala Sitharaman can present it in Parliament. According to the government, the aim of this bill is to simplify the language and structure of the Income Tax Act 1961.

According to reports, this bill will be introduced in the Parliament by the Finance Minister, which will replace the old Income Tax Act. Earlier, during the budget session, Nirmala Sitharaman had introduced the bill in the Lok Sabha.

What’s new in the bill?

This time the government has designed the new Income Tax Bill according to the common man. The number of chapters in it will be less. The number of chapters has been reduced from 47 to 23. The number of words has also been reduced by almost half to 2,59,676. Now it has 536 sections, earlier there were 819. 57 tables (earlier 18) and 46 formulas (earlier 6) have been added for ease of understanding. Along with this, easy and clear language has been used in the bill so that taxpayers can understand it easily. Old and useless rules have been removed so that there is no confusion. No changes have been made in tax policies and rates so that stability remains for taxpayers.

How was the bill made?

The government prepared this bill in consultation with taxpayers, businesses, industry groups and tax experts. 20,976 suggestions were received online, of which important suggestions have been incorporated. Along with this, the tax simplification models of Australia and the UK were also studied so that global best practices could be adopted.

What is the goal?

The Income Tax Bill 2025 aims to make tax rules less complex, more clear and reliable. By keeping the tax rules the same but making them easier to understand, the government wants to support taxpayers and make the process of doing business in India easier.

The post New Income Tax Bill will be presented in Parliament on this day! Here are the complete details first appeared on Rightsofemployees.com.

If they suspect that you have evaded income tax or they feel that you have any undeclared income, money, gold, jewelry, expensive goods or property on which you have not paid the applicable income tax as per the Income Tax Act, 1961, then they can do so.

What will change in the new income tax bill?

They will get this right under Section 132 of the Income Tax Act 1961, which allows the Income Tax Department to search and seize the properties, documents and accounts of any suspicious person. In simple words, in the New Income Tax Bill, the department will have the right to demand access to the digital assets of taxpayers.

The post New Income Tax Rules: IT Department will have access to your email and social media accounts! Details Here first appeared on Rightsofemployees.com.

This is also visible in the draft. Now the entire 12 months of the financial year will be called Tax Year, while the word Assessment Year will not be used. Apart from this, the picture has been clarified in the draft from standard deduction to capital gains tax. This New Tax Bill will come into effect from April 1, 2026.

Capital gains rates remain unchanged

According to this draft of 622 pages and 536 sections, the use of assessment year has ended and now it has been defined as tax year. The entire 12 months of the financial year will now be called tax year. No change has been made in the period of short term capital gains for the stock market in the draft. Under section 101 (b), a period of up to 12 months will be considered as short term capital gains. Apart from this, its rates have also been kept the same. Short term capital gain tax has been retained at 20%.

The number of pages in the Income Tax Act has been reduced

Another big change has been seen in the New Income Tax Bill 2025. That the number of pages in it has been reduced. It has become much less as compared to the Income Tax Act 1961 which was 63 years ago. Let us tell you that there were a total of 880 pages in the Tax Act 1961, which has now been reduced to 622. However, the chapter number has been kept as it is 23.

CBDT gets this right

The next big change in the New Tax Bill as compared to the Income Tax, 1961 is related to the Central Board of Direct Taxes i.e. CBDT. According to the bill draft, earlier the Income Tax Department had to approach the Parliament to start various tax schemes, but according to the New Tax Act 2025, now CBDT has been given the right to start such schemes independently. Its purpose is to eliminate the problem of bureaucratic delays.

It is clear that according to the New Tax Act, CBDT can now prepare and present tax related administrative rules without making repeated legislative amendments as per section 533. Along with this, it can implement a digital tax monitoring system.

No change in tax regime

Along with this, no change has been made regarding the New Tax Regime in the new tax bill 2025 and the rates announced in the budget will remain the same. Slabs have been changed in the new tax regime and income up to Rs 12 lakh has been kept out of income tax. Apart from this, the standard deduction under the new tax regime will be Rs 75,000 and in the old tax regime it will be Rs 50,000.

New tax slab 2025

Income up to Rs 4 lakh No tax

• 4 lakh From Rs 1 to Rs 8 lakh 5 per cent tax
• 8 lakh From Rs 1 to Rs 12 lakh 10 per cent tax
• 12 lakh From Rs 1 to Rs 16 lakh 15 per cent tax
• 16 lakh From Rs 1 to Rs 20 lakh 20 per cent tax

Let us tell you that this New Tax Act 2025 was approved in the Union Cabinet meeting led by PM Narendra Modi last week and now it will be introduced in the Lok Sabha, after which it will be sent to the Standing Committee for detailed discussion.

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The post New Income tax bill will be implemented from April 1, 2026, Key special in the 622 page draft? first appeared on Rightsofemployees.com.

For your information, let us tell you that no change has been made in the income tax slab in the new bill, nor is any amendment proposed in the capital gains tax. The main objective of this bill is to simplify the language of tax related rules, so that it becomes easier for the common man to understand and implement it.

However, there is a big change that you should be aware of. If you pay tax by choosing the old tax regime, then you will be well aware of the various tax saving options under Section 80C. Investments like Equity-Linked Savings Scheme (ELSS), Public Provident Fund (PPF), life insurance premium, National Pension System (NPS), and tax-saver deposits come under this section. All these options get tax exemption of up to Rs 1.5 lakh.

Provisions of 80C now in 123

There has been a big change regarding 80C in the new bill. All the exemptions available under 80C will now come under section 123. According to this section, “Any individual or Hindu Undivided Family (HUF) will get exemption on the amount paid or deposited in the tax year, which will be equal to the total of the amounts given in Schedule XV, but this exemption will not exceed Rs 1.5 lakh.”

“Section 123 in the new Income Tax Bill is in line with Section 80C of the current Income Tax Act 1961. This should be read along with Schedule XV, which is part of the bill and gives a detailed description of various tax saving options under Section 80C.”

What has changed in the new bill?

This new Income Tax Bill is 622 pages long and contains 536 sections. Whereas, the current Income Tax Act has 298 sections in 823 pages. The new bill has a section on every section of the current Income Tax Act, except those sections which have become irrelevant now.

According to Ajay Rotti, founder of Tax Compass, “The Income Tax Act of 1961 contains sections 80, 80C, 80D, 80E etc. The last section number in the current Income Tax Act is 298. But the new bill has re-numbered the sections, which may increase the number of sections to more than 500. However, overall this bill simplifies the tax laws.”

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The post New Tax Bill: Govt has abolished 80C, now how to get the benefit of Rs 1.5 lakh through ELSS, PPF, NPS? first appeared on Rightsofemployees.com.

The language of this 622-page draft is easier than the current Income Tax Act, 1961. The current Income Tax Act has a total of 880 pages. However, the chapter number in the draft of the new bill has been kept as it is 23. In the draft, only ‘Tax Year’ has been provided in place of the currently prevalent Assessment Year. Now the entire 12 months of the financial year will be called Tax Year, while the term Assessment Year will not be used. In the new bill, tax rules on Virtual Digital Assets (VDA) have been tightened. This Act will be known as the Income Tax Act, 2025. It is expected to come into effect from April 1, 2026.

The draft provides clarity on everything from standard deduction to capital gains tax. There is no change in the period of short term capital gains for the stock market in the draft. Under section 101 (b), a period of up to 12 months will be considered as short term capital gains. Apart from this, its rates have also been kept the same. Short term capital gains tax has been retained at 20 percent. A major change in the New Income Tax Bill is related to the Central Board of Direct Taxes i.e. CBDT. According to the bill draft, earlier the Income Tax Department had to contact the Parliament to start various tax schemes, but according to the New Tax Act 2025, now CBDT will be able to start such schemes independently.

New definition of ‘tax year’

In the new income tax bill, ‘tax year’ has been defined as a period of 12 months starting from 1 April. However, in case of a new business or profession, the tax year will start from the day it is established and end with the financial year. That is, now tax will be levied on the basis of economic activities and income earned in the tax year. According to experts, this change can make the tax reporting system more seamless in future. The word assessee has not been used in the draft of the new income tax bill.

Stringent provisions on virtual digital assets:

Now virtual digital assets (VDA) have also been included in the raid and calculation of undeclared assets. Earlier only cash, bullion, jewellery etc. were counted in it. Apart from this, explanations and provisions have been removed to simplify the law. New sections related to revenue recognition and inventory valuation have been added for service contracts. Deductions from salary such as standard deduction, gratuity, leave encashment etc. have been compiled at one place, so that they are not scattered in different sections.

There can be more changes.

Keep in mind that this is just a bill. This bill will be presented in the House this week or next week. Along with its presentation, it will be sent to the Standing Committee. There will be consultation on it. In such a situation, many changes can be made in it. Based on the changes that will be made on the basis of the Standing Committee’s recommendation, this bill will be placed in the Parliament. In such a situation, many things can change in it, we cannot deny the possibility of this.

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The post New Income Tax Bill: Tax year instead of assessment year, no change in STCG, 622 page draft revealed first appeared on Rightsofemployees.com.

This is seen as a historic bill which will replace the current legislation which was enacted way back in 1961.

Why is there a need for the new income tax law? There are essentially four aims to introduce the same. These are i) to reduce the litigation between taxpayers and income tax department, ii) simplification of text in the provisions, iii) removing the provisions that are not useful anymore and finally, iv) reducing procedural formalities which are avoidable.

The new law is expected to be around half the size of the current law with 25-30 percent fewer provisions.

New income Tax Bill: 10 key points to know

Cabinet nod: The new income tax bill has received the cabinet nod which means it will be tabled in the Parliament.

2. To be tabled: After it is tabled in the Parliament, it will be referred to a Parliamentary standing committee on finance which will start the consultation.

3. Comprehensive review: It was announced by Union Finance Minister Nirmala Sitharaman in July 2024 that the income tax law will undergo a comprehensive review, and the entire process will be completed in six months.

4. Public recommendation: Afterwards, suggestions were invited on income tax portal where taxpayers could give their suggestions with regards to any provision. The suggestions were meant to be given along four different criteria: simplification of language, litigation reduction, redundant provision and reducing compliance.

5. Adhering to justice: Finally, while presenting Budget 2025 on Feb 1, she again asserted her intent to roll out the new income tax law and said that this will be in line with the doctrine of nyaya (justice) under which the government replaced Indian Penal Code with Bharatiya Nyaya Sanhita.

“The new income-tax bill will carry forward the same spirit of ‘Nyaya’. The new bill will be clear and direct in text with close to half of the present law, in terms of both chapters and words. It will be simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation,” she had said during her Budget speech.

6. Half the size: After the Budget, Ms Sitharaman in an interview with Mint, mentioned that the new law will be half the size of the current law. “We hope that it will be at least half the size of the (old tax code),” she said.

She also mentioned that she wants to pass the bill in the Budget session of Parliament. “Normally, standing committees go through this (kind of bill),” she also said during this interview.

7. Easier to comply: The new law will be simpler and easier to comply with. It will also use fewer words to convey the same things. And several amounts which we used as either benchmark or ceiling are all being reviewed— whether they are relevant today, whether they need to be there today.

8. Decriminalised approach: FM has also highlighted that there will be a very decriminalised approach in the new income tax law to dealing with the penalties. Even now, Income Tax does not arrest you and take you anywhere, she told Mint.

9. Issues relating to interpretation: The bill aims to resolve the issues which arise out of interpretation done by various courts of law.

10. Avoid cross referencing: There is an expectation that the new bill will avoid cross-referencing which means referring to multiple provisions to make sense of what is said in one of them.

The post 10 key points of the new Income Tax Bill that every taxpayer should know first appeared on Rightsofemployees.com.

Will anything change with the introduction of the new bill

According to sources, after the implementation of the new Income Tax Bill (New Income Tax Bill 2025), the entire terminology related to the income tax rules will change. It is being said that after the new bill becomes a law, many old words will either be removed or changed. For example, after the new bill comes into force, tax year can be used in place of assessment year. There is talk of changing more similar words as well.

It will be easy for the common man to understand the rules

According to sources, as soon as the new bill becomes law, the use of many such words from the British era will also stop. These words have been in use for the last 60 years. Along with this, the language used in the income tax rules will also be simplified so that any common man can understand it easily.

Let us tell you that a few days ago, while presenting the general budget, Nirmala Sitharaman made a big announcement that now people with income up to Rs 12 lakh will not have to pay any tax. Finance Minister Nirmala Sitharaman surprised everyone by giving this tax exemption to people earning up to Rs 12 lakh. After the general budget, Nirmala Sitharaman had a special conversation with NDTV Editor-in-Chief Sanjay Pugalia. During this, she said that this decision has been taken after a lot of thought.

Saw the lifestyle of a person earning 1 lakh rupees

Finance Minister Nirmala Sitharaman had said that there is a lot of discussion in the middle class about what they got. Our focus is always on people from every sector. This time we saw what is the lifestyle of those who earn at least Rs 1 lakh? How do these people live… what kind of lifestyle do they maintain? After seeing all this, we came to the decision that those who earn Rs 1 lakh every month should be given exemption.

Referring to India’s economy, Finance Minister Nirmala Sitharaman had said that India’s fundamentals are good today and for this, PM Modi has been guiding us since long. He has been advising us to strengthen the fundamentals. He also included this aspect in it that we have to do something for the middle class who are our taxpayers, but the question was what to do. He had asked us to work on this.

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The post Union Cabinet has approved the new Income Tax Bill – Source first appeared on Rightsofemployees.com.

Decades old income tax rules are going to change. Now you will not hear many such words which you have been hearing for years. The new income tax bill will get the approval of the Union Cabinet on 7 February i.e. today evening. Then Finance Minister Nirmala Sitharaman can present it in the Lok Sabha on 10 February. After that it will be sent to the Parliament’s standing committee related to finance. The standing committee will consider it extensively.

With the implementation of the new Income Tax Bill, the terminology of income tax rules will change. You will not hear many such words, which you have been hearing for a long time. For example, tax year will now be used instead of assessment year. Currently, assessment year and financial year are used a lot in income tax rules. Financial year means the financial year for which you pay tax. Assessment year means the financial year in which you pay tax. Many people get confused in understanding the meaning of assessment year and financial year.

The second big change that is going to come is that the government will not have to amend the Income Tax Act to change many provisions of income tax such as the amount of deduction or rebate. The government will be able to make such changes instead of an executive order. This means that the government will be able to take decisions to change deduction and rebate as per the need quickly. This also means that the government will not have to use the Union Budget to provide relief to taxpayers . Currently, the government announces changes in the income tax rules in the Union Budget.

Sources say that after the implementation of the new Income Tax Bill, many words from the British era, which have been in use for more than 60 years, will stop being used. There are many such English words in these, which make the whole sentence cumbersome. Apart from this, the language used in the Income Tax rules is quite complex. Very complex words and methods are used to say things. Due to this, these rules and provisions are not understood by the common man. Due to this, the common people are not interested in understanding these rules.

Finance Secretary Tuhin Kant Pandey has already hinted about this. He said on February 6 that the use of long sentences has been avoided in the new Income Tax Bill. It is believed that the simplified language of income tax rules will increase the interest of taxpayers in them. This will also increase compliance. There will be a reduction in cases of tax disputes. This will increase the government’s revenue. According to government data, the number of disputed income tax cases is currently more than 2 crore. About 31 lakh crore rupees are stuck in these.

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The post New Income Tax Bill: ‘Tax Year’ will be used instead of Assessment Year, know what all is going to change first appeared on Rightsofemployees.com.

To make the tax system easier and transparent, the central government is bringing a new income tax bill. This bill is likely to get approval in the cabinet meeting to be held on Friday, February 7, 2025. After this approval, the bill can be introduced in the Lok Sabha next week. Let us tell you that with the passing of the new bill related to income tax, it will be easier to pay tax.

Efforts have been made to simplify the language to make the law related to it easier to read and understand. According to a report by news agency ANI, the new income tax bill was to be introduced in Parliament on Thursday. However, now there is news that it can be introduced tomorrow i.e. on Friday. Let us tell you that the budget session of Parliament started on 31 January. The first part of the session will run till February 13 and the second session will resume on March 10 and will run till April 4.

What is the detail

India Today has reported quoting sources that the new Direct Tax Code or the new Income Tax Bill may get approval in the Cabinet meeting on Friday and it may be introduced in the Lok Sabha next week. Let us tell you that Union Finance Minister Nirmala Sitharaman had announced during her Union Budget 2025 that the Center will bring a new Income Tax Bill. The New Income Act will try to replace the old Income Tax Act 1961 and simplify the rules and sections. Finance Minister Nirmala Sitharaman said on February 1, ‘The new Income Tax Bill will be clear and direct.’

What is the purpose

Let us tell you that the government has already made it clear that no new tax will be imposed in the bill and the focus will only be on simplifying tax rules, removing ambiguities and ensuring ease of compliance for taxpayers. Apart from this, several amendments are expected to be introduced in the existing law with a focus on reducing litigation. One of the provisions may include reduction in penalties for certain offenses, making the tax structure less punitive and more taxpayer-friendly. An important aspect of the new bill will also be the simplification of legal language, so that even ordinary taxpayers can easily understand tax provisions and their implications.

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The post New Income Tax bill may get cabinet nod tomorrow: Report first appeared on Rightsofemployees.com.

New Delhi. In her budget speech, Finance Minister Nirmala Sitharaman announced the introduction of a new Income Tax Bill in Parliament. The new Income Tax Bill can be tabled in Parliament on 6 February. The new bill will replace the existing Income Tax Act 1961. Central Board of Direct Taxes (CBDT) Chairman Ravi Agarwal says that the language of the new Income Tax Bill will be simple, due to which the common taxpayer will not have any difficulty in understanding it. This will increase tax compliance and reduce litigation.

Ravi Agarwal said that the language and sentence structure of the Income Tax Act 1961 is not taxpayer friendly, making it difficult to understand the provisions. This leads to confusion and lack of compliance, which ultimately leads to litigation. The new bill will be written in simple language, making it easier for taxpayers to understand. This will not only bring transparency in the system but will also reduce litigation.

Confidence in revenue growth

According to a Times of India report, Agarwal said that despite the increase in tax exemption to Rs 12 lakh in the budget and economic uncertainty, the Income Tax Department will not have any difficulty in achieving revenue targets. He said that increasing tax exemption will bring more money to people. This will accelerate business activities, which will also benefit the economy. He said that if companies grow, salaries will also increase and this will also increase tax revenue.

The CBDT Chairman said that this year, tax collection is witnessing a growth of 15%, while the budget target has been set at 12.46%. We have also added an additional margin of 2-2.5% and are working towards achieving the target through confident dialogue with taxpayers. He said that the department is now adopting a cooperative approach towards taxpayers. Earlier the attitude of tax administration was adversarial, but now we are adopting a non-interventionist and participatory approach. Tax collection cannot be seen separately from the growth of the economy, it should be in sync with it.

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The post New Income Tax bill: CBDT told what will be the benefit of the new income tax bill first appeared on Rightsofemployees.com.

Actually, the new Income Tax Act will be introduced in the Parliament during the budget session. This will be a new law, not an amendment to the existing Act. Recently this draft was with the Law Ministry. The main objective of the new Income Tax Act is to make the existing Income Tax Act, 1961 easy, clear and understandable.

What changes are possible in the new Income Tax law?

– The law should be written in simple language so that common people can understand it easily.
– Unnecessary and obsolete provisions will be removed.
– Tax litigation will be reduced.
– Compliance will be made easy for taxpayers.
– For this, the Income Tax Department has received 6,500 suggestions from the public and industry for these reforms.

Let us tell you, earlier Finance Minister Nirmala Sitharaman had said that more than 65 percent of taxpayers in the country have adopted the New Tax Regime, that is, 2 out of every 3 people are filing income tax under the New Tax Regime. This data has changed a lot in the last one year, because when the government implemented the New Tax Regime in Budget 2020, people were reluctant to adopt it.

New tax regime

– ₹0-₹3 lakh: Nil
₹3-₹7 lakh: 5%
₹7-₹10 lakh: 10%
₹10-₹12 lakh: 15%
₹12-₹15 lakh: 20%
Above ₹15 lakh: 30%

Old Tax Regime

– Income from Rs 0 lakh to Rs 2.5 lakh: 0%
– Income from Rs 2.5 lakh to Rs 5 lakh: 5%
– Income from Rs 5 lakh to Rs 10 lakh: 20%
– Income above Rs 10 lakh: 30%

It is worth noting that at present, under the old tax regime, there is a provision of 30% income tax on income above Rs 10 lakh, while in the new tax regime, there is a provision of 30% income tax on income above Rs 15 lakh.

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The post New Income Tax Bill: New Income Tax Bill will come next week, Finance Minister announced first appeared on Rightsofemployees.com.

First there is tax on income, and on top of that there is planning for tax. Both are headaches for the taxpayer. The government also knows this very well. This is the reason why the Government of India introduced the new tax regime, so that the taxpayer at least does not have to plan to save tax. Now a news is coming out that the government can introduce a new income tax bill in the upcoming budget. The purpose of this bill will be to simplify the laws related to tax and coordinate with the current economic conditions.

There are only a few days left for Budget 2025 to be presented. Economic experts are speculating about various things. According to a PTI report, Finance Minister Nirmala Sitharaman may introduce a new Income Tax Bill in the upcoming budget session. This bill will replace the Income Tax Act of 1961, which is about 63 years old. According to the report, the government wants to make this bill more concise and effective by reducing its size to 60.

The government will introduce this bill directly in Parliament, where the views of taxpayers, experts and other stakeholders will be included before it is finalised. The new bill will be more transparent, controversy-free and easily understandable compared to the current law. It aims to not only reduce taxpayers’ grievances but also simplify the compliance process.

Income Tax Department sought suggestions

To prepare this bill, the Central Board of Direct Taxes (CBDT) has formed an internal committee, which will monitor the entire amendment process. Apart from this, 22 sub-committees have been formed to study various aspects of the Income Tax Act.

The Income Tax Department has also sought suggestions from the public to make the new bill more effective. Suggestions have been emphasized to simplify the language, reduce disputes, ease compliance and remove old provisions. So far, the department has received more than 6,500 suggestions, which can be incorporated in the new law.

The expert committee is considering dividing the current law into two or three parts so that taxpayers of every category can understand it easily. This will not only reduce complexities but will also reduce disputes.

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The post Income tax New Bill: New Income Tax Bill to simplify taxation in India, Likely to be introduced in the budget session of 2025 first appeared on Rightsofemployees.com.