The much-anticipated new Income Tax Bill will retain existing short-term (STCG) and long-term capital gains (LTCG) tax rates, according to sources cited by CNBC-Awaaz. This clarification comes as Finance Minister Nirmala Sitharaman prepares to introduce the new Bill in the ongoing Parliament session.

The Central Board of Direct Taxes (CBDT) has undertaken a comprehensive review of the Income Tax Act, 1961. An internal committee and 22 specialised sub-committees were set up to simplify the language, reduce litigation, and eliminate redundant provisions in the Act. The goal is to provide clarity, ease compliance, and ensure tax certainty for taxpayers.

The July 2024 Budget had introduced significant changes: STCG on equities, equity funds, and business trust units (InvIT and REIT) was raised from 15% to 20%, while LTCG for all asset classes was uniformly set at 12.5%. Despite concerns over these revisions, no additional changes will be made in the upcoming Bill.

Taxpayers and stakeholders were invited to submit suggestions in four categories: simplification, dispute reduction, compliance ease, and removal of outdated clauses. Over 6,500 suggestions were received.

The Tax Year is defined as a 12-month period starting April 1 of the financial year.

With the first leg of the budget session ending on February 13, the second leg will reconvene on March 10 and continue through April 4. FM Sitharaman's proposal to introduce the new tax Bill was first announced in the July 2024 Budget.

The Bill is expected to modernize India's tax laws, paving the way for a more transparent and streamlined taxation system while reducing legal complexities.