The new 2025 income tax bill, which is expected to be presented in Lok Sabha this week, has received approval from the firm and is about to make significant changes to the tax framework of India .
One of the key updates is replacing the term “evaluation year” by “fiscal year”, aimed at simplifying the understanding of taxpayers.
According to the bill, “the taxation year” will be defined as the 12 -month exercise period from April 1. For newly established companies or newly resulted sources of income, the tax year will start from the date of the installation or generation of income and end on March 31.
This change should provide clarity tax calculations and rationalize individuals and businesses.
The proposed legislation, covering 622 pages, aims to replace the income tax law of six decades of 1961. Once adopted, it will be known as the income tax law, 2025, and should enter into force from April 1, 2026.
The Minister of Finance, Nirmala Sitharaman, announced the introduction of this bill during the budget session in July last year, stressing its importance in the simplification of tax compliance and the promotion of an environment more suitable for taxpayers. This decision is considered an important step towards revising the tax infrastructure of India, guaranteeing greater transparency and ease of understanding taxpayers across the country.
With these changes, the government aims to reduce complexities and create a more effective tax regime, paving the way for a smoother financial ecosystem.
