The Income Tax Bill 2025 brings more clarity to the method for computing capital gains on shares, debentures, liquidation, and slump sales without altering the fundamental principles, Price Waterhouse & Co LLP said in a media interaction on February 13.
"While specific formulas have been introduced to simplify calculations, the conceptual basis remains the same," PwC added.
Apart from removing redundant provisions and simplifying the language, the new income tax bill also provided for formulae, tables, and structures for further clarity.
To the extent possible, provisions involving the same issues, which were present in different chapters in the current Act, have now been consolidated.
Finance Minister Nirmala Sitharaman on February 13 tabled the new Income Tax Bill in the Lok Sabha. The bill, which is headed for a select committee is expected to come into force from April 1, 2026.
As expected, the bill does not propose any changes to income-tax rates or slabs or to the capital gains tax regime and sticks to simplifying the language to make compliance easier.
"In reviewing the bill, we observed efforts to consolidate related provisions into dedicated sections. For instance, all exemptions related to non-residents have been grouped into a single schedule, making it easier to reference specific exemptions. Similarly, regulations pertaining to NGOs, previously scattered across multiple chapters, have now been consolidated," experts from PwC added.
The bill also ensures continuity of existing jurisprudence. Since substantial changes in legal language could lead to fresh litigation, the government has retained key phrases where necessary while simplifying overall structure, they added.
PwC's experts also clarified that no new discretionary powers have been granted to the CBDT (Central Board of Direct Taxes) and the new bill only consolidates previously scattered provisions under one section, that may have created the impression of expanded authority.
A note by CBDT on frequently asked questions released alongside the bill too confirmed that the department's responsibilities remain unchanged.
The new bill aims to address concerns around the current 1961-Income Tax Act becoming increasingly bulky over time, with its traditional style of drafting and numerous amendments.
"A notable improvement is the reduction of verbose text, making the legislation more accessible. For example, legal jargon such as ‘notwithstanding’ has been replaced with ‘irrespective of,’ and ambiguous phrases have been refined to prevent misinterpretation. Additionally, inspiration has been drawn from tax reforms in the UK and Australia, ensuring the bill’s approach aligns with international best practices," PwC noted.
Sanjay Tolia, Partner, PwC says that the new bill focusses on modernising India's tax system.
“Once approved by the President, the government will update tax rules, forms and IT systems accordingly. Businesses will also need to update their systems at the same time. Overall, this marks a transition towards a more modern tax system for both taxpayers and the administration," Tolia added.
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