NEW DELHI: The Union Cabinet on Friday approved the new income tax bill, which will replace the six decades old Income Tax Act, sources said.
The new bill seeks to make direct tax law simple to understand and not to impose any new tax burden. It will not have provisos and explanations or long sentences.
The Cabinet, chaired by Prime Minister Narendra Modi, approved the New Income Tax Bill, sources said.
Sources said the new income tax bill will now be introduced in the Parliament next week and would be sent to Parliament's Standing Committee on Finance.
The first leg of the ongoing budget session ends on February 13. The session will reconvene on March 10 and sit through April 4.
Finance Minister Nirmala Sitharaman had announced in Budget 2025-26 that the new tax bill will be introduced in the ongoing session of Parliament.
Sitharaman had first announced a comprehensive review of the Income-tax Act, 1961 in July 2024 Budget.
The CBDT had set up an internal committee to oversee the review and make the Act concise, clear, and easy to understand, which will reduce disputes, litigations, and provide greater tax certainty to taxpayers. Also, 22 specialised sub-committees have been established to review the various aspects of the Income Tax Act.
Public inputs and suggestions were invited in four categories -- simplification of language, litigation reduction, compliance reduction, and redundant/obsolete provisions.
The income tax department has received 6,500 suggestions from stakeholders on review of the Income Tax Act.