New Income Tax Bill
The new Income Tax Bill will not change short-term capital gains (STCG) and long-term capital gains (LTCG) tax rates, according to a report by CNBC-Awaaz on February 12.
The Central Board of Direct Taxes (CBDT) formed an internal committee to simplify the Income Tax Act, making it clearer and easier to understand. The goal is to reduce legal disputes and provide more tax certainty for taxpayers. Additionally, 22 sub-committees were set up to review different sections of the law.
In the July 2024 Budget, Finance Minister Nirmala Sitharaman announced new tax rates:
Short-Term Capital Gains (STCG) from stocks, equity funds, and business trust units (InvIT and REIT) will now be taxed at 20% instead of 15%.
Long-Term Capital Gains (LTCG) will have a uniform tax rate of 12.5% across all asset classes.
The government is working on simplifying tax rules by reducing unnecessary regulations and removing outdated provisions. The Income Tax Department has received 6,500 suggestions from stakeholders to help improve the Income Tax Act.
Public Suggestions & New Terminologies:
The government received 6,500 suggestions from the public in four areas:
Simplifying language
Reducing litigation
Easing compliance
Removing outdated provisions
According to CNBC-TV18, a new bill proposes 23 chapters and 16 schedules with simplified terms. The term “tax year” will replace “assessment year,” and “financial year” will replace “previous year.”
The tax year will be a 12-month period starting from April 1 each year.
Finance Minister Nirmala Sitharaman announced in the 2025-26 Budget that a new tax bill will be introduced during the current Parliament session. She had first proposed a complete review of the Income Tax Act, 1961, in the July 2024 Budget.
The first phase of the budget session ends on February 13.
The session will resume on March 10 and continue until April 4.
The goal of the new bill is to make tax laws easier to understand, reduce confusion, and provide greater tax certainty for taxpayers.