Key Highlights:
- The Union Cabinet has approved a new Income Tax Bill to replace the 1961 Act.
- The bill aims to simplify tax laws without adding any new tax burdens.
- No income tax for individuals earning up to ₹12 lakh per year.
What’s Changing in the Income Tax Law?
The Indian government is making big changes to the income tax system! The Union Cabinet has approved a new Income Tax Bill, which will soon be introduced in Parliament. This bill will replace the six-decade-old Income Tax Act of 1961 with a simpler and clearer tax law.
Unlike the current system, the new tax law will be easy to understand, with shorter sentences and fewer complicated explanations. The aim is to reduce tax disputes and litigations, making life easier for taxpayers.
To ensure fairness and clarity, the government invited 6,500 suggestions from the public. A special committee has been working to simplify the law while keeping it taxpayer-friendly.
How Will It Benefit Taxpayers?
One of the biggest reliefs announced by Finance Minister Nirmala Sitharaman is that people earning up to ₹12 lakh per year will pay zero income tax! Earlier, only incomes up to ₹7 lakh were tax-free, but now this limit has been increased.
For those earning ₹12.75 lakh per year, tax deductions will bring their taxable income below the limit, meaning they too will pay zero tax. Additionally, people earning up to ₹25 lakh per year will get tax benefits, helping them save up to ₹1.1 lakh in taxes.
What’s Next?
The new tax bill will be introduced in Parliament next week and sent to the Standing Committee on Finance for review. Once passed, it will bring a modern, transparent, and taxpayer-friendly system.
This is a big step towards making taxation simpler and fairer for everyone!
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