Union Budget 2025: FM Sitharaman Announces New Income Tax Bill to Simplify Tax Compliance
Direct Tax Code to Replace 1961 Act, Aims for 60% Reduction in Complexity
Finance Minister Nirmala Sitharaman revealed plans to introduce a new Income Tax Bill based on the Direct Tax Code (DTC) in the upcoming week.
The bill seeks to overhaul the outdated Income Tax Act of 1961, promising a simplified tax framework for individuals and businesses. By cutting through bureaucratic complexities and streamlining compliance, the proposed reforms aim to make taxation more accessible and transparent for the average taxpayer.
The DTC is designed to minimize legal disputes and enhance compliance by consolidating various provisions into a more coherent system.
In her previous budget speeches, Sitharaman indicated a focus on middle-class taxpayers, suggesting that the new tax structure may include revisions to income tax slabs and increased standard deductions. Currently, under the new tax regime, there are no taxes on income up to ₹3 lakh, with incremental rates applied thereafter.