FinMin asks ICAI to review new Income Tax Bill 2025, suggest improvements
New Delhi, Feb 14, 2025
Central Board of Direct Taxes expects the Institute of Chartered Accountants of India to go through the bill section-by-section, keeping in mind the needs of both businesses and individual taxpayers
The Finance Ministry has asked the Institute of Chartered Accountants of India (ICAI) to review the new Income Tax Bill 2025 and suggest improvements. A five-member group has been formed by the ICAI to carefully study the bill and make recommendations, according to a report by The Economic Times.
According to the media report, the Central Board of Direct Taxes (CBDT) has requested detailed feedback on the bill. The ICAI will go through the bill section by section, keeping in mind the needs of both businesses and individual taxpayers. The aim is to make the process easier for everyone, ensuring a balance between smooth business operations and easier living for taxpayers.
Finance Minister Nirmala Sitharaman introduced the bill in Parliament on Thursday, which aims to create a simpler and more investor-friendly income tax system. The bill has also been sent to a parliamentary committee for a thorough review.
In December 2024, ICAI suggested a special tax regime for partnership firms, which are currently taxed at 30 per cent. Additionally, they proposed a 12 per cent surcharge on incomes over Rs 1 crore. ICAI also made several other recommendations, such as simplifying tax registration for charitable trusts, setting time limits for appeals, and improving the grievance redressal system.
What’s changing in the new Income Tax Bill 2025?
The new bill cuts down the current Act by 201 pages, removing excess provisions and explanations for better clarity. While the amended Income Tax Act of 1961 spans 823 pages (as of 2024), the new Income Tax Bill is more concise at 622 pages.
To minimise confusion, the assessment year will now be termed as ‘tax year’. For new businesses, the tax year will commence from their date of establishment.
The bill resolves long-standing uncertainties regarding Sections 44AD, 44AE, and 44ADA, particularly affecting professionals. It also refines profit computation by introducing the term “profit claimed to have been actually earned.”
[The Business Standard]
