The government has tabled the Income Tax (No. 2) Bill, 2025, replacing the decades-old Income Tax Act, 1961, with a simpler and streamlined law. The bill reduces the number of sections from 700 to 536, simplifies legal language, and introduces tax exemptions for National Pension Scheme (NPS) contributors.
Key highlights include revised regulations for virtual digital assets, a “trust first, scrutinise later” compliance approach, and changes in TDS and TCS rates to ease taxpayer burden. The bill also aims to reduce litigation, encourage voluntary compliance, and modernise India’s tax system in line with committee recommendations.
The accompanying Taxation Laws (Amendment) Bill will address technical gaps in existing laws and further rationalise fiscal policies.
