New I-T bill slashes sections by over 42% to 536 for easier compliance

The current Income-Tax Act, 1961, has around 931 sections

The Income-tax Bill, 2025, marks a significant change in India’s tax laws by reducing the number of sections by 42 percent and increasing the number of schedules from 14 to 16. This move aims to simplify the tax structure, reduce the compliance burden and make the law easier for taxpayers to understand.

"The current Income-tax Act, 1961, has around 931 sections and 14 schedules. The new bill significantly reduces the number of sections to 536 while expanding schedules to 16," said Vivek Jalan, partner at Tax Connect Advisory Services LLP. "This aligns with the government’s intention to simplify the statute and eliminate redundant or overlapping provisions."

In tax legislation, sections are individual provisions that outline specific rules, obligations or rights under the law. They serve as the building blocks of the statute, covering various aspects like income computation, tax deductions, penalties and compliance procedures. Schedules, on the other hand, are annexures to the main act that provide additional details, explanations or procedural guidelines related to the sections. While sections set the primary framework, schedules support them with in-depth information on specific topics such as tax rates, exemptions and reporting formats, ensuring comprehensive clarity and guidance for taxpayers.

The new bill consolidates several related provisions to reduce complexity while introducing updated rules. The focus is on building a more concise and structured law that aligns with modern business practices and ensures better compliance, Jalan said.

"This reduction in sections is not just about trimming the law—it’s about making it more readable and coherent," Jalan added. "The government has consolidated provisions and ensured that overlapping regulations are removed. This will reduce ambiguity for taxpayers and professionals."

Schedules expanded 

The addition of new schedules to 16 from the current 14, is meant to provide detailed rules on tax rates, exemptions, deductions and procedures for various categories of taxpayers.

The overhaul is in line with the government’s broader tax reform agenda to modernise and simplify India’s direct tax framework. The reduction in sections reflects the government’s intent to make tax laws more comprehensible and user-friendly, particularly for small businesses and individual taxpayers, Jalan said.

By streamlining the law and eliminating unnecessary complexities, the new bill is expected to improve compliance and reduce errors in tax filings.