Union Finance Minister Nirmala Sitharaman introduced the Income Tax Bill, 2025, in the Lok Sabha on Thursday, urging Speaker Om Birla to form a select committee to review the legislation.

The committee's terms and conditions will be determined by the Speaker, and it is expected to submit its report by the first day of the next parliamentary session. The Bill was introduced amid opposition protests.

According to the Central Board of Direct Taxes (CBDT), after parliamentary approval, new rules and forms will be notified, along with software updates for administrative and quasi-judicial functions.

A section-wise mapping of old and new laws will be available on the Income Tax Department's website. The Bill draws from the Direct Tax Codes proposed in 2009 and 2019 and eliminates approximately 1,200 provisos and 900 explanations for clarity.

Key changes include consolidating salary-related deductions such as gratuity, leave encashment, and pension commutation into a single section. The Bill also introduces "tax year" instead of "previous year" and "assessment year," aligning with global tax practices.

While some experts appreciate the effort to simplify tax laws, concerns remain. Aditi Goyal from Trilegal noted that the Bill still references the existing Income Tax Act, potentially complicating interpretation.

Opposition MPs, including Saugata Roy and Manish Tewari, criticized the Bill as unnecessary, arguing it retained more sections than the existing Act. Sitharaman countered, stating that the revised law significantly reduces word count and sections, streamlining tax regulations.