Union Finance Minister Nirmala Sitharaman, Reserve Bank of India Governor Sanjay Malhotra and Directors during the 613th Meeting of Central Board of Directors (CBD) of the RBI in New Delhi on February 8, 2025.
| Photo Credit: PTI

Finance Minister Nirmala Sitharaman on Saturday (February 8, 2025) said she is likely to introduce the new income tax bill, which will replace the six-decade-old I-T Act, in the Lok Sabha in the coming week.

After introduction in the Upper House, the bill will be sent to a parliamentary standing committee for scrutiny.

Also read: Union Budget 2025 highlights

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the bill on Friday (February 7, 2025).

“Yesterday, the Cabinet cleared the New Income Tax proposal, I hope to have it introduced in the Lok Sabha in the coming week. Post that it will go to a committee,” Ms. Sitharaman said a media briefing after addressing the post-Budget customary meeting with the central board of directors of the Reserve Bank of India (RBI).

The bill will again go to the Cabinet after the parliamentary committee gives its recommendations on it. After Cabinet approval, it will again be introduced in Parliament.

“I still have three critical stages to pass through,” Ms. Sitharaman said to the query regarding rollout of the new income tax law.

Ms. Sitharaman had first announced a comprehensive review of the Income-Tax Act, 1961 in the July 2024 Budget.

The CBDT had set up an internal committee to oversee the review and make the Act concise, clear, and easy to understand, which will reduce disputes, litigations, and provide greater tax certainty to taxpayers.

Also, 22 specialised sub-committees have been established to review the various aspects of the Income Tax Act.

To another question, the Finance Minister said the last week’s Budget announcement on customs duty rationalisation is a work that has been on since the last two years.

“So we had rationalised some even two years ago. We also set certain norms saying evergreening is not going to happen on anti-dumping duties, which had played a big role in giving some kind of a protection for India’s own manufacturing capabilities,” she said.

Ms. Sitharaman further said with every such expiry date getting closer, the government will review it thoroughly, and only in exceptional cases duties will be extended, but most often they should be concluded so that the protection does not become a perpetual protection.

“So, this is an ongoing process. We want to make India a lot more investor-friendly, trade friendly, and at the same time, balance it with Aatmanibhar Bharat where we need to have production, particularly through the MSMEs. We will provide the tariff protection as required by the industry,” the Finance Minister, who presented her eighth straight Budget on February 1, said.

In her Budget speech, Ms. Sitharaman had announced rationalisation of customs tariff structure for industrial goods.

As part of comprehensive review of customs rate structure announced in July 2024 Budget, on February 1, 2025 she proposed to remove seven tariff rates.

This was over and above the seven tariff rates removed in the 2023-24 Budget. There will be now only eight remaining tariff rates, including ‘zero’ rate.

Finance Minister Nirmala Sitharaman had announced in Budget 2025 that the new tax bill will be introduced in the ongoing session of Parliament.
| Photo Credit: Getty Images/iStockphoto

The Union Cabinet on Friday (February 7, 2025) approved the new income tax bill, which will replace the six decades old I-T Act, sources said.

The new bill seeks to make direct tax law simple to understand and not to impose any new tax burden. It will not have provisos and explanations or long sentences.

The Cabinet, chaired by Prime Minister Narendra Modi, approved the New Income Tax Bill, sources said.

Sources said the new income tax bill will now be introduced in the Parliament next week and would be sent to Parliament’s Standing Committee on Finance.

The first leg of the ongoing budget session ends on February 13, 2025. The session will reconvene on March 10 and sit through April 4.

Finance Minister Nirmala Sitharaman had announced in Budget 2025-26 that the new tax bill will be introduced in the ongoing session of Parliament.

Ms. Sitharaman had first announced a comprehensive review of the Income-Tax Act, 1961 in July 2024 Budget.

The CBDT had set up an internal committee to oversee the review and make the Act concise, clear, and easy to understand, which will reduce disputes, litigations, and provide greater tax certainty to taxpayers. Also, 22 specialised sub-committees have been established to review the various aspects of the Income Tax Act.

Public inputs and suggestions were invited in four categories — simplification of language, litigation reduction, compliance reduction, and redundant/obsolete provisions.

The income tax department has received 6,500 suggestions from stakeholders on review of the Income Tax Act.