New Income Tax Bill vs. 60-Year-Old Act: Key Differences ExplainedNew Income Tax Bill vs. 60-Year-Old Act: Key Differences Explained

Today, the New Income Tax Bill is set to be presented in Parliament. As with the previous Income Tax Act of 1961, which lasted over sixty years, the Income-Tax Bill 2025 is poised to create a shift within India’s taxation system. 

The new law is expected to come into force starting the 1st of April 2026. After introducing the bill in the Lok Sabha, the bill will go to the Parliamentary Standing Committee on Finance. The bill increases the number of sections from 298 to 536. Along with these sections comes the addition of 2 new schedules with the existing 14, making it a total of 16. 

What is the new income tax bill aiming to change? 

In relation to the common belief, the new bill is being designed to actively alter and access tax slabs alongside revising tax rebates, which is not the case. It's intent is not attention grabbing so to speak, as its purpose is primarily restructuring a bill that has sat dormant for decades into something more useful. Unlike Direct Taxes Code (DTC) proposals from 2009 and 2010 that enacted drastic changes, the new bill solves major issues while keeping key parts of the DTC untouched.

The Bill is set forth to propose the new notion of ‘tax year’ which is simply any twelve months starting from April 1st. This will alter the current definition of assessment and previous year. For example, any income accrued in the period between April 2024 and March 2025 would be placed under the Upgraded Assessment Year (2025-26).

What will the Bill do to change the Income Tax System?

As part of a broader simplification exercise and elimination of provisos and explanations, the Bill will bring even greater expectation by replacing terms assessment and previous year with the rather self-explanatory ‘tax year’.