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“Some provisions have been proposed that will allow the government to modify the limits or amounts of deductions/rebates through executive orders only,” according to a Moneycontrol report citing a source.
New Income Tax Bill.
The new income tax bill 2025, which is likely to receive the Union Cabinet’s approval on Friday, is likely to have a unique feature that will eliminate the need to wait for the budget for some kind of income tax reliefs or amend the Income Tax Act, according to a Moneycontrol report citing two sources.
The report cited one of the sources as saying: “Some provisions have been proposed that will allow the government to modify the limits or amounts of deductions/rebates through executive orders only.”
Another source, according to the report, said: “Changes to the standard deduction could be among these provisions.”
The Cabinet is likely to approve the Income Tax Bill 2025 on Friday its first meeting after the Budget. After Cabinet approval, it is expected to be tabled in the Lok Sabha, most likely on Monday and could be referred to the Parliamentary Standing Committee on Finance for wider consultation.
Why Is Govt Bringing In New Income Tax Bill?
The new legislation, also known as the Direct Tax Code, is aimed at revamp the existing income tax structure to simplify the provisions. It will replace the existing Income Tax Act, 1961.
During her Budget Speech 2025, Finance Minister Nirmala Sitharaman said the bill would embody the same philosophy of Nyaya that was at the heart of Bharatiya Nyaya Sanhita. The law had repealed the Indian Penal Code of 1860 from July 2024.
In the Budget Speech, she said, “I am happy to inform this August House and the country that the new income-tax bill will carry forward the same spirit of “Nyaya”. The new bill will be clear and direct in text with close to half of the present law, in terms of both chapters and words. It will be simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation.”
Expectations from New Income Tax Bill
The is expected to bring in simplified residence rule, which could give more clarity to determine the residential status of a taxpayer.
It will simplify the overall tax structure by reducing complexity.
It is also expected to make the compliance of the income tax law easier for taxpayers and income tax authorities.
