Tax law simplification bill to set stage for fresh reforms

The Income Tax Bill 2025 seeks to simplify an over-60-year-old piece of legislation

- Gireesh Chandra Prasad

The Income Tax Bill 2025, set to be moved in the monsoon session of Parliament to simplify the direct tax law, will set the stage for another round of reforms which will be more substantive in nature in subsequent years, said two people informed about the discussions in the government.

The finance ministry is of the view that once the over-six-decade-old Income Tax Act, 1961 is simplified and made more readable, targeted reforms can be achieved in taxation of personal and corporate income. This will be done through the annual Finance Acts, said one of the persons quoted above.

Major areas of dispute set to be ironed out in the future include how multinational corporations value their cross-border transactions with group entities, which in turn has an impact on the profits offered for taxation in India.