Sweeping Reforms: New Income Tax Bill Set to Streamline India's Taxation System
The Indian Parliament has approved a new income tax bill to replace the 1961 Act, effective April 1, 2026. The bill simplifies the tax code, reducing sections and streamlining language, with no new taxes imposed. The tax reforms aim to enhance clarity and simplify tax administration processes.
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- India
In a landmark decision, India's Parliament has passed a new income tax bill designed to overhaul the existing tax framework. Scheduled to take effect from April 1, 2026, the new legislation replaces the outdated Income Tax Act of 1961.
Finance Minister Nirmala Sitharaman highlighted that the new bill, driven by simplification, reduces legislative complexities. It slashes the number of sections and chapters and introduces tables and formulas to enhance comprehension without imposing new tax rates.
The change marks a pivotal step in tax administration reform, intending to make tax laws more taxpayer-friendly. Despite skipping the debate, the Opposition has been criticized for not participating. Extensive efforts went into drafting this bill, with comprehensive FAQs to be released soon to aid public understanding.
(With inputs from agencies.)
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