The 63-year-old Income Tax Act is about to end, know how different the new bill will be from the old one

New Income Tax Bill: The new Income Tax Bill will be made keeping in mind India's changing economy, the digital age and the needs of the taxpayers. If it makes tax compliance easier and increases transparency, it can prove beneficial for traders, middle class and investors.

New Income Tax Bill: The Income Tax Act implemented in India in 1961 is now on the threshold of change. In 2025, the government is preparing to bring a new Income Tax Bill, which can bring major reforms in the existing tax structure. What new will this change bring for taxpayers and how will it be different from the old law? Let's know.

Why is the new Income Tax Bill coming?

The Income Tax Act of 1961 is 63 years old and about 7000 amendments have been made in it over time. The existing law is complex and difficult, causing problems for traders, investors and common taxpayers. The government wants to make it simple, digital-friendly and less controversial. The new bill is being prepared keeping in mind the modern economy and Digital India.

How will the new Income Tax Bill be different?

Simple and clear provisions: The new bill will have more clarity in fewer words, which will make it easier for taxpayers and CAs (chartered accountants) to understand the law.

Digital and AI-based tax system: There will be more use of e-filing and artificial intelligence (AI), which will reduce human intervention in tax assessment.

Changes in tax slab possible: There is talk of rationalizing the tax slab in the new bill, which can provide relief to the middle class.

Reduction in tax disputes: Currently thousands of cases are pending in tax appeals and courts. The new law can bring a new framework to settle them faster.

Convenience for small traders and startups: Simple tax compliance and low tax rates are expected for startups, MSMEs and small traders.

Strictness on black money and tax evasion: The new law may have strict provisions on benami property and black money deposited abroad.

The main difference between the old Income Tax Act 1961 and the new bill

Language and complexity: The Income Tax Act of 1961 was written in legal and technical terms, making it difficult for common taxpayers to understand it. The new Income Tax Bill will be prepared in simple and clear language, so that even common people can understand it easily.

Amendments and updates: More than 7000 amendments have been made in the Income Tax Act 1961 in the last 63 years, making this law highly complex. The new law will come with updated and clear provisions according to the time, which will reduce the need for unnecessary amendments.

Technology and digital system: The old law was based on manual processing, while the new bill will promote Artificial Intelligence (AI) and digital tax system, which will bring transparency in tax determination and reduce human intervention.

Tax dispute and resolution process: Currently, thousands of tax disputes are pending in the courts, causing trouble to both taxpayers and the government. The new law will bring a new framework for faster dispute resolution, which can reduce the time taken in legal matters.

Possible changes in tax slabs and rates: According to the 1961 law, tax slabs were changed from time to time, but it is still complex. There are possibilities of rationalizing and simplifying the tax slabs in the new bill, which can provide more relief to the middle class.

Convenience for small traders and startups: In the old tax system, tax compliance was quite complex for small traders and startups. The new bill will focus on making the tax system easy and convenient for small businessmen, MSMEs, and startups.

Control over black money and tax evasion: The old law had provisions to deal with black money and tax evasion, but their effect was limited. The new Income Tax Bill may bring even stricter provisions on benami property and foreign black money so that tax evasion can be curbed.

Disclaimer: Prabhat Khabar does not give any suggestion for any purchase or sale related to the stock market. We publish market related analysis quoting market experts and brokerage companies. But take market related decisions only after consulting certified experts.