Income Tax Bill 2025: Will it increase Tax Burden for The Middle Class?

Markets Discussions
1

The New Income Tax Bill, set to be presented in Parliament on February 13 (tomorrow) , aims to replace the six-decade-old Income Tax Act of 1961.

image
image1279Ă—720 135 KB

Spanning 622 pages, the proposed legislation, once passed, will be called the Income Tax Act, 2025, and is expected to take effect in April 2026. The bill seeks to simplify the existing tax structure, reduce legal disputes, and make direct taxes more transparent. The Union Cabinet has already cleared the bill, following Finance Minister Nirmala Sitharaman’s announcement in the Budget 2024 speech.

Over the past decade, the government has introduced major tax reforms, including faceless assessment, a taxpayers’ charter, faster refunds, 99% self-assessment returns, and the Vivad se Vishwas scheme. In the 2024 Budget, the government emphasized the need for a comprehensive review of the Income-tax Act, 1961, to make it more concise, clear, and less litigation-prone.

With this bill, the government aims to build a simpler and more predictable tax system that benefits taxpayers and businesses alike.

Will the new Income Tax Bill increase the burden for the Middle Class? What do you think - eager to hear your comments on the new bill :point_down:

1 Like
2

Some nitty gritty of the budget documents and good insight for anybody trying to understand and decode it.

1 Like
3

Yes. It can be difficult for the Middle Class to relearn on the new sections and provisions in the Income Tax Act, 2025.

However, with the new rebates allowing people with incomes of up to 12.75 lakhs to have no tax to worry about, about 60% of current individual taxpayers won’t need to stress about remembering these updates and rules.

1 Like
4

unlikely as the goal is to simplify the taxation laws

1 Like