New income tax bill likely to be tabled soon in Parliament. Will it introduce new taxes?

The new bill, which will be applicable from April 1, will focus on bringing new reforms along with simplification and rationalization of the tax filing process.

The new Income Tax Bill, also referred to as Direct Tax Code, is likely to be approved by the Union Cabinet on February 7, which will clear the way for its introduction in the Lok Sabha on Monday, India Today said in a report.

The Direct Tax Code was announced in the Budget 2025 by Union finance minister Nirmala Sitharaman on February 1.

The bill is entirely new and rewritten and will have to passed in the Parliament, finance secretary Tuhin Kanta Pandey had said in an interview with Moneycontrol.

The bill is likely to be sent to the Standing Committee for further discussions and refinement.

Will the new tax code introduce new taxes?

It will not include any new taxes, Pandey confirmed during the interview with Moneycontrol. “It will not change (tax rates) in that because that will be the prerogative of the tax policy. But structurally, it undergoes a massive change. The way it reads, the way it connects, the way it is understood. And the way the redundancy is removed. So, rationalization and simplification exercise will follow in that,” Pandey clarified.

So, what will the new tax code focus on?

The new bill, which will be applicable from April 1, will focus on bringing new reforms along with simplification and rationalization of the tax filing process.

The new bill will also have an easy to understand language for ordinary citizens, making the tax regulations more people-friendly and less punitive. The new bill could also have provisions reducing penalties and an effort to cut litigations and redundancies by decriminalizing some of the offences.

Pandey said, “Some of those decriminalisations we have already done. So, the point is, whatever reforms have been done, it will be seamlessly carried forward”.