CBDT Introduces Self-Help Tool for Instant Answers on Income Tax Bill 2025
The Income Tax Department has launched an online self-help tool designed to help taxpayers navigate the changes proposed in the Income Tax Bill 2025. This tool, available on the official website of the Income Tax Department, allows users to compare provisions from the current Income Tax Act, 1961, with the newly proposed legislation.
How the Self-Help Tool Works
The tool provides a simple interface where taxpayers can select specific sections from the existing Income Tax Act via a dropdown menu. Once a section is chosen, the corresponding clause from the new Income Tax Bill 2025 is displayed alongside it. Additionally, the tool offers a tabular comparison format to enhance clarity and ease of understanding.
Announcing the tool’s activation, the Income Tax Department stated in a post on X: “The utility for comparing sections of the Income Tax Act, 1961, with the corresponding clauses of the new Income Tax Bill has been activated.”
Additionally, the department has introduced a utility to check sections of the Income-tax Act, 1961 (as amended by Finance (No. 2) Act, 2024) vis-a-vis corresponding clauses of the Income-tax Bill, 2025. This feature aims to further assist taxpayers in understanding the direct impact of legislative amendments and ensure a seamless transition to the new tax framework.
Key Highlights of the Income Tax Bill 2025
The Income Tax Bill 2025 was introduced in the Lok Sabha on February 13, 2025, with the objective of simplifying the complex Income Tax Act of 1961. Over the years, the existing Act has undergone multiple modifications, primarily through annual updates in the Union Budget. The new Bill aims to provide a streamlined and modern tax framework.
1. Significant Reduction in Word Count and Complexity
-
The new Bill has been significantly simplified, reducing its word count from 5.12 lakh words in the current Income Tax Act to just 2.6 lakh words.
-
The number of chapters has been reduced from 47 to 23, while the sections have been condensed from 819 to 536.
2. Introduction of ‘Tax Year’ Instead of ‘Assessment Year’ and ‘Previous Year’
A key terminology change in the new Bill is the replacement of ‘assessment year’ and ‘previous year’ with ‘tax year,’ which represents the 12-month period starting from April 1. This change aims to eliminate confusion and make tax compliance easier for taxpayers.
3. Enhanced Readability and Simplification of Legal Language
-
Traditional legal jargon has been replaced with simpler, more comprehensible terminology.
-
Sections covering multiple scenarios are now listed in an enumerative format.
-
The use of tables has been expanded, making tax provisions easier to understand. For example, TDS provisions are now presented in a structured tabular format.
-
Section 10, which previously contained nearly 150 clauses, has been moved to Schedules and reformatted into tables for better clarity.
Conclusion
The introduction of the Income Tax Bill 2025 marks a major step toward simplifying tax compliance for individuals and businesses alike. By launching an intuitive self-help tool, the Income Tax Department is empowering taxpayers with instant access to crucial information, ensuring a smooth transition to the new tax framework. Taxpayers are encouraged to explore this tool to understand how the proposed changes impact them and to stay updated with the latest tax regulations.