As India moves closer to a major tax overhaul, the new Income-Tax Bill 2025 seeks to simplify the tax structure and to make it more transparent, efficient, and business-friendly.

Expected to be tabled in Parliament on Thursday, the proposed bill aims to replace the decades-old Income Tax Act, 1961, which has become increasingly complex due to continuous amendments, court rulings and exemptions.

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While these changes had good intentions, they resulted in a tax code that became difficult to interpret which led to rising litigation, higher compliance costs, and confusion among taxpayers.

The Income-Tax Bill 2025 proposes cutting down the number of sections by almost half, from 819 to 536, eliminating redundant exemptions, and reducing the total word count from 5 lakh to 2.5 lakh.

One of the major shifts in India’s tax policy began in 2017-18 when corporate tax rates were lowered while eliminating several deductions.

This move made the system fairer, benefiting small businesses that previously struggled with complex tax structures.

By eliminating unnecessary tax incentives and moving towards a fairer tax structure, the Government aims to ensure that all taxpayers contribute their share without relying on loopholes.

This will strengthen India’s tax base and improve revenue stability in the long run. The bill also brings India’s tax system closer to global best practices.

By learning from successful tax models worldwide, the Government hopes to boost investor confidence and attract more foreign businesses.

A well-structured, transparent tax system makes India a more attractive destination for economic growth.

One of the key features of the new bill is its focus on technology-driven tax compliance.

As digital tools become more advanced, tax scrutiny and filing are shifting towards automation and AI-driven assessments to make tax administration more efficient and reduce tax evasion.

To ensure greater clarity, the bill also includes tables, examples, and formulas to explain tax provisions to make it easier for individuals and businesses to interpret.

By simplifying tax laws, the Income-tax Bill 2025 will allow businesses to focus more on growth and investment rather than tax planning.

The combination of lower rates and clear regulations creates a more business-friendly environment, which will drive economic expansion.