New Income Tax Bill: The government has made the new Income Tax Bill public before it is set to be tabled in the Parliament on 13 February, 2025. The new document spans over 622 pages and will be replacing the six-decade-old Income Tax Act 1961. The Bill includes 23 chapters, 16 schedules and 536 clauses to simplify tax language.
The bill proposes simple terms such as ‘tax year’ and proposes the introduction of a taxpayer’s charter, a detailed section suggesting foreign cos to be deemed as residents
It introduces a new tax regime with a focus on simplifying tax compliance and offering an alternative tax structure to individuals and businesses. Here are the key takeaways for taxpayers:
Here’s all you need to know as a tax payer.
New Tax Regime:
The bill proposes a new tax regime for individuals, Hindu Undivided Families (HUFs), and others. Once a taxpayer opts for the new regime, it cannot be withdrawn in later years unless specific conditions are violated. Under this system, taxpayers will need to forgo certain deductions and exemptions in exchange for a lower tax rate
Impact on Taxpayers:
Salaried individuals may see reduced compliance burdens under the new system, but they must weigh the loss of deductions before opting in. Businesses can benefit from lower corporate tax rates but must ensure they meet the eligibility conditions.
Special Tax Provisions for Cryptocurrency
Crypto traders and investors will need to comply with stricter taxation and reporting requirements. The Bill reinstates a flat 30% tax on income from virtual digital assets including – crypto, NFTs, etc. There will be no deductions or exemptions allowed, except for the cost of acquisition. It also proposed a 1% TDS on crypto transactions remains applicable to track digital transactions
New Income Tax Bill 2025 Live Updates: 'Old tax regime beneficial for those earning above ₹12.75lac', expert
Sandeep Agrawal Director and Founder of Teamlease Regtech believes, "The New Income Tax Bill, is set to reduce 50% of the current provisions, marking a significant step towards simplifying tax laws and replacing the six-decade-old Income Tax Act of 1961."
"The bill is expected to make compliance easy for taxpayers and administrators alike, ultimately helping to cut down on tax-related litigation," he further added.
However, he asserts the revised tax regime favours incomes up to ₹12 lakh, but for those earning above ₹12.75 lakh, staying in the old regime might still be beneficial if they invest heavily in tax-saving instruments.
New Income Tax Bill 2025 Live Updates: The key changes in new income tax bill
New Income Tax Bill 2025 Live Updates: Influencers and Digital Content Creators to be taxed
The Income-Tax Bill, 2025 has introduced specific provisions for social media influencers, YouTubers, freelancers, and digital content creators to ensure compliance with income tax regulations.
The bill explicitly categorizes digital creators, YouTubers, and social media influencers as taxable entities under business income.
The bill has introduced tighter TDS rules on brand parternerships - TDS on free products & bartered deals: Brands giving products (cars, phones, luxury items) must deduct TDS on their fair market value, making influencers pay tax on gifts.
Revenue generated from paid promotions, sponsored content, advertisements, and fan subscriptions is subject to taxation under business income.
Tax authorities can now track online revenue streams using digital forensics
New Income Tax Bill 2025 Live Updates: Tax Raids and Searches
The Income-Tax Bill, 2025, introduces detailed provisions for search, seizure, and tax raids. These provisions will empower tax authorities to conduct raids, seize assets, and scrutinize undisclosed income.
The reason to believe or reason to suspect for ‘Searches’ need not be disclosed as per Sec 149
New Income Tax Bill 2025 Live Updates: I-T Bill document shrinks in size
In its efforts to simplify the tax language the length of new document has also been reduced by 23%. The is Current Income Tax Act is of 801 pages, whereas the new one is is only 622 pages.
The new income tax bill has not imposed any new penalties or charges for delay in tax filing. According to the provisions in the proposed bill Taxpayers must pay self-assessment tax before filing income tax returns.
Late filing leads to: Interest charges at 1% per month. Late fees of ₹5,000 and ₹1,000 for taxpayers with income below ₹5 lakh.
New Income Tax Bill 2025 Live Updates: Rules for TDS and TCS
The new bill proposes that TDS rules will apply to salaries, professional fees, interest income, rent, and more.
TCS is applicable on specific transactions, such as:
The Sale of alcohol, tendu leaves, minerals, and scrap materials (1%-5%)
Sale of motor vehicles above ₹10 lakh (1%).
Foreign remittances exceeding ₹7 lakh (5%).
Penalties for TDS/TCS defaults will attract below mentioned penalties:
Failure to deduct/pay TDS or TCS results in an assessee being considered in default.
Interest on unpaid TDS/TCS will be charged at 1% per month
New Income Tax Bill 2025 Live Updates: Advance Tax Provisions
According to the new income tax bill taxpayers liable for advance tax must pay it in four instalments:
New Income Tax Bill 2025 Live Updates: Tax on Crypto Assets
The government has maintained its strong position on investment in cryptocurrencies in the new income tax bill.
New Income Tax Bill 2025 Live Updates: Taxation on Specific Incomes
The new income tax bill states, that income interest will be subject to rates in force with ₹10,000 threshold for general taxpayers and ₹50,000 for senior citizens.
Income from securities, mutual funds, and offshore investments will be taxed at 10%-12.5% depending on the nature of investment
Online gaming and gambling winnings will attract a flat tax rate, with a ₹10,000 threshold per transaction for lottery and gambling wins.
New Income Tax Bill 2025 Live Updates: Corporate taxes
The Bill states, that new manufacturing companies incorporated on or after a specified date can opt for a 15% concessional tax rate. The concessions will be taken provided they do not claim deductions
All other domestic companies opting for the new tax system will be taxed at 25%.
New Income Tax Bill 2025 Live Updates: No Option to Switch Back
New Income tax Bill won’t allow tax payers to switch between old and new regime. Once a taxpayer opts into the new tax regime, he/she cannot be withdrawn for the same or any subsequent tax year, unless specific conditions are violated
New Income Tax Bill 2025 Live Updates: New Tax Regime highlights
The new tax regime introduces revised tax slabs for individual taxpayers. While the exact slab rates are not detailed in this summary, the bill specifies that:
The tax rates for individuals have been modified under the new regime.
Total Income (₹)Tax Rate
Up to ₹4,00,000 – Nil
₹4,00,001 – ₹8,00,000 5%
₹8,00,001 – ₹12,00,000 10%’
₹12,00,001 – ₹16,00,000 15%
₹16,00,001 – ₹20,00,000 20%
₹20,00,001 – ₹24,00,000 25%
Above ₹24,00,000 30%
Taxpayers must opt into the new regime and once selected, cannot revert back
New Income Tax Bill 2025 Live Updates: Tax language simplified in the new I-T Bill
The new I-T Bill Introduces new terminologies, such as “Tax Year” replacing “Assessment Year. Financial Year will replace the term previous year.
Tax Year has been defined as a 12-month period starting from April 1, aligning with the financial year.
Accountants will now be defined as chartered accountant under the Chartered Accountants Act, 1949. However, certain individuals are excluded from acting as an accountant for tax purposes, such as: A company’s statutory auditor and a relative, employee, or business associate of the taxpayer
New Income Tax Bill 2025 Live Updates: The Income-Tax Act, 2025 will be implemented from April 1, 2026
The government will be tabling the new income tax bill in the Parliament on February 13, 2025 and has shared the key document public.
In 622 pages the Bill documents a new wave of tax reforms in 23 chapters and 16 schedules.
It has redefined tax assessment year as tax year and will come into force on April 1, 2026. Bill is expected to be tabled on February 13, 2025