13 Feb 2025
It introduces the term ‘Tax Year’ – 12 months from April 1. The term will replace the existing concept of assessment and previous years.
The new Income Tax Bill is proposed to be implemented from April 1, 2026. It rewrites the direct tax law to improve compliance and reduce litigation. It retains the old tax regime, rates, and capital gains for individuals and businesses.
There will be no change in tax rates or introduction of any new taxes for individual salaries. However, the Bill consolidates deductions like standard deduction, gratuity, and Tax Deducted at Source (TDS) into one place and introduces a formula for calculating depreciation and taxes.
Incomes not included in the total income that were earlier part of the main body of the IT Act have been shifted to separate schedules to simply the new Bill.
The Bill introduces Section 275 )6) mandating the Dispute Resolution Panel (DRP) to provide detailed directions, explaining the points of determination, the decision, and its reasons. It will enhance transparency and reduce reliance on past rulings.
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