Presenting the Union Budget 2025-26 in Parliament on Saturday (February 1), Finance Minister Nirmala Sitharaman announced that the government will present a new income tax bill next week.
What the Finance minister said on the new income tax bill?
FM Sitharaman highlighted the tax department's "trust first, scrutinise later" approach, reaffirming the government's commitment to simplifying compliance.
The new income tax bill will be simpler to understand and will reduce litigation, the Finance Minister said.
Expected to follow the Direct Tax Code (DTC), this bill seeks to replace the existing Income Tax Act of 1961, making tax compliance more efficient for both individuals and businesses.
The bill seeks to simplify the tax framework and improve compliance, underscoring the government's commitment to a transparent and efficient tax system.
Boost to middle class:
Meanwhile, giving taxpayers a reason to celebrate, FM Sitharaman raised the income tax rebate limit from Rs 7 lakh to Rs 12 lakh.
Resident Indian taxpayers will benefit from the rebate, effectively exempting salaried individuals earning up to Rs 12.75 lakh from tax. In a move aimed at increasing middle-class savings, the minister also proposed a revision of tax slabs under the new regime.
A look at the new tax brackets:
Rs 0-Rs 4,00,000 – Nil
Rs 4,00,001-8,00,000 – 5%
Rs 8,00,001-12,00,000 – 10%
Rs 12,00,001-16,00,000 – 15%
Rs 16,00,001-20,00,000 – 20%
Rs 20,00,001 to Rs 24,000,000 – 25%
More than Rs 24 lakh - 30%
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