How different will be the new income tax law from the old tax law?

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Finance Minister Nirmala Sitharaman introduced the New Income Tax Bill 2025 in the Lok Sabha on 11 August 2025, which also passed from the Lower House within just 4 minutes. Preparations for this bill have been going on for a long time. In the budget 2025, the Finance Minister had reported its table. However, it will have to be passed in the Rajya Sabha, then after the President’s sign or the law will be made. Let us understand which new amendments in the new income tax bill are and how much will be the old tax law i.e. the Income Tax Act 1961?

The Central Government withdrew the old draft of the New Income Tax bill from the House on 8 August 2025. This was the same draft, which was introduced in Parliament during the budget. After that, the bill has been sent to the Pravar Committee. The government has accepted almost all the suggestions given by the committee and a new bill has been introduced to replace the Income Tax Act 1961, which has been running for 6 decades.

New Income Tax Bill 2025

The Pravar Committee submitted a report of about 4,500 page to the government with 285 suggestions after a review of about 4 months, after which it was reflected and the central government introduced a new bill with 535 sections and 16 schedules. In this bill, it has focused more on making the language of law simple and easy. The bill has more power to CBDT, so that it can work in a more transparent manner about the tax system.

Difference between Income Tax Act 1961 and New Tax Bill

The government has introduced this bill to replace the old law. In this, the main focus has been done on making the language of the law simple and easy.

  1. Income Tax Act, 1961 has been the basis of India’s tax system for the last 60 years. It was updated several times, but these changes make it difficult for complex and common people.
  2. Income tax bill, 2025 wants to replace it with an easy and modern system. It has 536 sections and 16 schedules and has been replaced by a new term ‘tax year’ instead of old “Previous Year” and “Assessment Year”.
  3. This bill clears things by removing old and confusing rules and reduces quarrels. Also, the Central Board of Direct Taxes (CBDT) has been given more power to make rules according to today’s digital economy, so that the law is also fit in the future.

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