New Delhi: After offering significant relief to the Indian middle class in the Union Budget for 2025-26, the government is ready to introduce a new Income Tax Bill this week. This new bill aims to simplify the entire tax system, bringing in important reforms.

The current Income Tax Act, which has been in place since 1961, is being replaced by a new version designed to meet the needs of the 21st century. Finance Minister Nirmala Sitharaman announced in the Budget that the country requires a new tax regime, with the new bill likely to be introduced in Parliament on February 6.

A review committee has been formed to replace the old, complex tax law. Based on the committee's recommendations, the government has prepared the new Income Tax Bill.

In today's digital world, many tax-related tasks can be done online, and the new bill is designed to make the system even easier for taxpayers. By simplifying the rules, the government aims to make the tax process more accessible for everyone.

Man with service tax report documents

The new bill is expected to be much shorter than the old law. While the current Income Tax Act contains about 6 lakh words, the new bill will reduce this to around 3 lakh words, making it easier for taxpayers to understand.

The government is also focusing on simplifying the language of the new bill, as the current rules can be confusing, with many provisions open to different interpretations.

Since its introduction in 1961, the Income Tax Act has undergone numerous amendments, making it increasingly difficult for people to understand. The government believes a new bill will make the system more straightforward.

While some people worry that the new tax rules will mean the end of the old tax regime, sources have stated that the government has no plans to abolish it at this stage. Currently, around 78% of taxpayers have switched to the new tax regime, but no significant changes to the old system are expected.

Additionally, the government aims to encourage people to invest in a wider range of assets, including mutual funds, SIPs, and the stock market, rather than relying solely on government schemes. This, in turn, will boost private consumption and contribute to a healthier economy.