New Income Tax Bill 2025: What are expected changes and how will they affect you?

The central government may table the new Income Tax Bill 2025 in Parliament on February 13. The bill aims to simplify tax laws and modernise compliance structures. It also aims to make it easier for taxpayers to understand the rules and regulations even without the help of professionals. The new bill concerning income tax consists of 23 chapters, 16 schedules and 536 clauses covering a wide range of tax provisions.

Among the key proposed changes if the use of simpler terminology. The bill proposes to replace the term ‘Assessment Year’ with the term ‘Tax Year’ and replace ‘Previous Year’ with ‘Financial Year’. The term ‘Tax Year’ then will represent the 12-month period starting from April 1, aligning it with the financial year framework. At present, income earned in the financial year 2024-25 is assessed in the next financial year, which in this case will be assessment year 2025-26.