Parliament refers new Income Tax Bill to select committee for review

Union Finance Minister Nirmala Sitharaman on Thursday tabled the 2025 Income Tax Bill in the Lok Sabha, before it was referred to a select committee for scrutiny.

The select committee will examine the changes being proposed to the Income Tax law and submit a report to Parliament by the first day of the next session, Sitharaman said.

While the draft legislation does not propose major structural changes to the law, Sitharaman said it aimed to simplify the language of the tax code and remove redundant provisions.

The Union government has proposed that the bill, if cleared by Parliament, will take effect in the financial year 2026-’27. Once enacted, it will replace the 1961 Income Tax Act, which has been amended several times.

The finance minister had proposed the introduction of the direct tax bill while presenting the Budget on February 1.

The new Income Tax Bill comprises 536 sections, as compared to 298 in the current law. The number of schedules in the draft legislation are 16 as compared to the 14 in the existing law.

The Opposition claimed that the Union government had made the proposed legislation more complex.

“The Union finance minister said that the new Income Tax Bill would be easy,” Congress MP Manish Tewari said. “It has instead become more complicated.”

The Lower House was adjourned till…

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