Dr Gopal Krishna Raju, Chartered Accountant, Chennai

The new Income Tax Bill 2025 is set to be tabled tomorrow at the Lok Sabha by Union Finance Minister Nirmala Sitharaman, signalling a major overhaul of the decades-old Income Tax Act of 1961.

Since the proposed Bill is expected to significantly impact taxpayers across India, Timeline spoke with Dr Gopal Krishna Raju, a Chartered Accountant and a leading tax expert, to understand the potential implications of this new tax framework.

According to Gopal Krishna Raju, the Income Tax Bill 2025 will bring a wave of simplification to the taxation system, addressing many of the complexities that have historically burdened both individuals and businesses. He detailed several key changes that will likely jerk with various sectors and income groups in the country.

Also, read| RBI’s Repo Rate Cut: A Welcome Relief For Home Loan Borrowers?

“While the Income Tax Act of 1961 consisted of 296 sections, the new Income Tax Bill 2025 includes 536 sections, marking it as one of the most comprehensive tax laws in India,” he said.

The new Income Tax Bill is designed to simplify the process for taxpayers as with clearer language and a streamlined approach, this bill will bring much-needed clarity that the tax compliance easier for salaried individuals, business owners, and pensioners alike,” he added.

One of the major changes in this new Bill is the simplification of legal language. Complex tax jargon that has previously made the tax system difficult to comprehend has been removed.

This move is expected to enable taxpayers, regardless of their level of legal expertise, to understand their obligations and rights clearly.

He also pointed out that the new Income Tax Bill 2025 introduces several changes, particularly in how income categories are structured.

“Many of the previous subclasses have now been separated into distinct sections, making the tax code more detailed and organised,” he said.

He also highlighted important changes regarding tax audits for businesses. Under the previous law, businesses with a turnover below one crore were exempt from a tax audit.

However, the new Bill raises this threshold to five crore, significantly reducing the number of businesses that will need to undergo an audit.

Moreover, the audit threshold for businesses conducting bank transactions has also been revised. Previously, the limit was set at ₹10 crore, but under the new Bill, it has been increased to ₹25 crore.

Also, read| RBI Cuts Repo Rate To 6.25%: First Rate Cut In 5 Years

This change is expected to impact many businesses that previously faced audits but will no longer be subject to them.

Since all eyes are on how the provisions will be debated and finalised, Experts like Gopal Krishna Raju expect that these changes will not only simplify tax filing but will also contribute to higher compliance rates, resulting in increased tax revenue and enhanced government spending on public services.

For answering the question of whether the Income Tax Bill 2025  introduces any new taxes, he answered that the focus is on simplifying existing provisions in lieu, ensuring greater predictability and stability for both individuals and businesses.

“The Bill introduces several new sections, particularly focusing on previously existing income categories such as capital gains, salaried income, and business income.

Also, the Income from Other Sources category, which used to end at section 59 in the old law, now spans additional sections, reflecting the broader scope of tax compliance under the new regime,” he added.