The recently introduced Income-tax Bill, 2025, in the Lok Sabha is expected to refine the landscape of tax compliance in India, though it may not have any direct or immediate impact on revenue collection, minister of state in the ministry of finance Pankaj Chaudhary stated on Tuesday.
“While the exercise of simplification may not have a direct or immediate effect on revenue collection per se, all amendments proposed up to the Finance Bill 2025 have been duly incorporated in the new Income-tax Bill, 2025. Therefore, the Bill stands updated from a policy perspective,” Chaudhary said in a written reply to the Lok Sabha.
The government’s goal with the new Bill is to simplify the existing Income-tax Act, 1961, making it “concise, lucid, easy to read and understand.” This aligns with the government’s broader initiatives to boost taxpayer compliance through clearer regulations, as per Chaudhary. He emphasised that the changes are designed to encourage taxpayer compliance, noting, “The simplification exercise aims to create a statute of taxation that is accessible to and comprehensible not just to tax professionals but to informed citizens as well.”
Guided by three core principles—improving clarity and coherence, ensuring continuity and certainty without major tax policy changes, and maintaining predictability by preserving current tax rates—the Bill seeks to enhance the overall ease of doing business in India. “Ease of paying taxes is an important pillar of ease of doing business,” said Chaudhary.
The Bill retains existing technological reforms, including initiatives such as pre-filled income tax returns (ITRs), the Annual Information Statement, and faceless proceedings. The reorganisation of sections within the Income-tax Bill, 2025, aims to facilitate easier navigation without requiring new compliance training for businesses and professionals.
“This reorganisation is not expected to require businesses and professionals to undergo any new compliance training. In fact, it is expected to make compliance easier for the ordinary taxpayer,” Chaudhary remarked.
