New Income Tax Bill 2025: 5 Key Things Every Taxpayer Should Know

The New Income Tax Bill 2025 is expected to come into effect in April 2026 and will replace the existing ‘Income Tax Act, of 1961.’ While there is a lot of buzz about this new bill, our experts have shared insights on how this is going to impact the taxpayers in India. Scroll down to learn about the key details of the New Income Tax Bill 2025.

5 Key Things Every Taxpayer Should Know About New Income Tax Bill 2025

Here are a few things every taxpayer should know:

Simplify The Taxation

The new tax bill aims to simplify the current tax system by reducing the section count from 819 to 536 and reducing the word count by 40% to 50%. A significant number of explanations and conditions have been eliminated.

Simplification Of Language

According to Prashant Bhojwani, Partner, Corporate Tax, Tax & Regulatory Services, BDO India, “The Finance Ministry’s endeavour to simplify the Income-tax law and present a reader-friendly statute is commendable. This is certainly a positive starting point and should facilitate in reducing tax disputes going forward.”

Munjal Almoula, Head of Tax, BDO India, commented, “As was expected, the New Income Tax Bill doesn’t seek to introduce any additional tax burden on taxpayers. What the bill attempts to do is simplify the language contained in the Income-tax Act of 1961, provide greater clarity through explanations and provide more transparency to taxpayers."

Guidance On Taxability

Munjal Almoula highlighted that the new tax bill provides guidance on the taxability of income streams emanating through new-age businesses, such as digital assets.

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Tax Transparency

According to Ajay Kumar Yadav, CEO and CIO, Wise Finserv Private Wealth, "The Income Tax Bill 2025 ushers in a new era of tax reforms, emphasising simplification, clarity, and digital compliance. By restructuring provisions from the 1961 Act, the bill aims to minimise disputes, promote ease of filing, and ensure greater tax transparency.” He highlighted that the changes in capital gains taxation, global income reporting, and revised exemptions call for strategic financial planning.

Residency Law Remains Unchanged

The residency law will remain the same in this New Income Tax bill. The new bill will have the same residency categories: Ordinarily resident, Not-ordinarily resident, and on-resident, which is based on physical presence in India.

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