Union Finance Minister Nirmala Sitharaman tabled a bill in the Parliament on Thursday in a bid to consolidate and amend the current law related to income tax and direct taxes in India. The new Income-Tax Bill 2025—with 536 sections with 23 chapters spanning 622 pages—if enacted, would replace the bulkier, complex, and amendment-riddled Income-Tax Act 1961.
These were "not mere mechanical changes but substantial [ones]", Sitharaman stated, responding to the opposition being voiced by West Bengal MP Sougata Roy, and two others.
Roy stated that the current Income Tax Act 1961 need not be revised since it was "serving its purpose" and need not be introduced since the basic purpose remained the same.
Kerala MP N.K. Premchandran’s objection was "not correct at all", said Sitharaman. The union minister added that Premchandran stated that the Income Tax Act 1961 had only 219 sections, and therefore the new Bill did not serve the purpose of simplifying it. To this, Sitharaman stated that the Act in its current state has 819 sections and that the MP should be using that as the reference. "From this 819, we are bringing it down to 536," added the minister.
Chandigarh MP Manish Tewari also argued that the sections were more in the current bill rather than when the older one was introduced in 1961, to which Sitharaman said, "That is a point." However, she said that it was answered, referring to her earlier response to Premchandran’s objection.
Four thousand amendments that were made since 1961 "are being looked at now", she added. "They are being reduced now."
Citing Tewari’s objection, Sitharaman quipped, "I don't think he has even looked into the papers."
Responding to Roy, the finance minister said that substantial changes have been made, and the number of words—around 5.5 lakh words in the current Act—has "come down by half" in the latest bill. Over and above the reduction in the number of chapters, the bill is in "plain, simple English," she added.
Noting the opposing remarks and stating that they were not sustainable ones, the finance minister also requested the Speaker of the House to constitute a select committee in the Lok Sabha to study and produce a report on the new bill before the first day of the next section.
The government listed the tax bill for introduction in the Lok Sabha on Thursday, as per the agenda circulated by the Lok Sabha secretariat on Wednesday.
The first mention of the bill occurred when Sitharaman was tabling the Union Budget 2025 on February 1.
The Narendra Modi-led government has, on several occasions, expressed their resolve to simplify certain acts. This could mean replacing terminologies such as "assessment" and "previous year" with more accessible terms such as "tax year" in the current bill—a move in line with simplifying governance language.
A more detailed breakdown of the bill is expected to be discussed in the Parliament in the upcoming sessions.
