NEW DELHI: The New Income Tax Bill, which will be tabled in Parliament on Thursday, is longer than the existing one with 23 chapters, 536 sections and 16 schedules. The current Income Tax Act has 23 chapters, 298 sections and 14 schedules.
The increase in number of sections reflects a more structured approach to tax administration, incorporating modern compliance mechanisms, digital governance, and streamlined provisions for businesses and individuals.
The bill, a copy of which is in the possession of this paper, proposes a deduction for purchase of electric vehicles, revises donation rules, and updates medical and education related deduction. It proposes stronger regulations for crypto-assets and digital transactions, and a simplified refund process. The bill uses the term ‘tax year’ instead of ‘previous year’ to streamline the reporting process.
The bill has simplified legal terms to reduce litigation due to multiple interpretations. According to a chartered accountant who reviewed the bill, the new law is crisp and clear, and it includes past judicial decisions, bringing more clarity. “The new law is longer, but it has given straight-jacketed answers to a number of issues,” said the CA.
Under the new bill, the Central Board of Direct Taxes and finance ministry get more powers to issue rules, notifications, and exemptions through delegated legislation.
Rajat Mohan, senior partner, AMRG Associates, said businesses expect the bill to deliver a growth-friendly tax regime while ensuring policy stability. “Key demands include rationalised corporate tax rates, structured capital gains taxation, among others,” he said.
Existing I-T Act to be repealed w.e.f. April 1, 2026
After Parliament clears the new bill, it will replace the existing Income Tax Act, which has been in force since 1962. The Act will be repealed effective from April 1, 2026. Tax proceedings for years prior to April 1, 2026 will follow provisions of the 1961 Act. The new bill runs into 600 pages as against 880 pages in the existing one