New Income Tax Bill, half the size of 1961 I-T Act, built on core ‘SIMPLE’ principles: What are they?news24

New Income Tax Bill 2025: The simplified Income Tax Bill, half the size of the 1961 Income Tax Act, seeks to achieve tax certainty by minimising the scope of litigation and fresh interpretation, said the Income Tax (I-T) department on Thursday, February 13. According to the I-T department, the tax bill aims to simplify the tax system based on six core ‘SIMPLE’ principles, with ‘SIMPLE’ being an abbreviation for the fundamentals on which the bill is based.

Earlier today, the I-T department took to microblogging platform ‘X’ (formerly Twitter) and said, “The Income-Tax Bill 2025 has been introduced in the Lok Sabha today. The Bill aims to simplify the tax system for all and is built on these core “SIMPLE” principles.” The I-T department went on to explain the principles as follows:

New Income Tax Bill 2025: Core “SIMPLE” principles of new Income Tax Act

S: Streamlined structure and language
Provisions are rewritten in plain, easy-to-understand language for tax laws.

1: Integrated and concise
No more distributed provisions. A single, well-structured Act consolidates all related provisions. The volume is reduced without losing the spirit.

M: Minimise litigation
More clarity, fewer tax disputes. FAQs, guidance notes, and explanations to prevent multiple interpretations. It is a win for both taxpayers and the tax administration.

Follow Live Updates: New Income Tax Bill 2025 LIVE: FM Nirmala Sitharaman introduces new I-T Bill in Lok Sabha

P: Practical and transparent
A tax law for convenience. Eliminates redundant provisions, simplifies cross-references, and uses tables and structured formats for better clarity. Understanding taxation made easier.

L: Learn and adapt
A tax system that evolves with the world. Adopts global best practices from various tax jurisdictions. Keeps India’s core tax principles intact. Balanced, future-ready reforms.

E: Efficient tax reforms
Clarity without disruption. Ensures reforms don’t disturb settled tax policies. Focuses on improving efficiency.

New Income Tax Bill 2025 – Half the size of I-T Act

The new bill, introduced in the Lok Sabha, has a word count of 2.6 lakh, lower than 5.12 lakh in the I-T Act. The number of sections is 536, as against 819 effective sections in the existing law. The number of chapters has also been halved to 23 from 47, according to the FAQ issued by the I-T department.

Also Read: New Income Tax bill 2025 tabled in Parliament: Top 10 highlights every taxpayer MUST know

The Income Tax Bill 2025 has 57 tables, compared to 18 in the existing Act, and removed 1,200 provisos and 900 explanations. Finance Minister Nirmala Sitharaman, while introducing the Bill, said that “substantial changes” have been made in the Act.

Provisions relating to exemptions and TDS/TCS have been made crisper in the Bill by being put in tabular format. In contrast, the chapter on not-for-profit organisations has been made comprehensive with plain language. According to the I-T department, the word count of the I-T Act has come down by 34,547.

“While undertaking simplification exercise, a conscious attempt has been made to minimise the scope of litigation and fresh interpretations,” it said to a query on whether principles of Tax Certainty were followed in drafting the new Bill.

Keywords/phrases, especially where courts have given rulings, have been retained with minimal modifications. Provisions have been made clear to minimise the scope of multiple interpretations, and tax certainty has been ensured regarding various sections of international taxation.

Also Read: New Income Tax Bill 2025: All FAQs on tax slabs, old vs new regime, and more answered

Revised income tax slabs

Income up to ₹12 lakh is now exempt from taxation, with a standard deduction of ₹75,000, effectively making income up to ₹12.75 lakh tax-free for salaried individuals. Revised tax slabs and higher exemption limits will give the middle class more money, potentially boosting consumer spending and savings.