Proposed Income Tax Bill 2025 Won't Alter Tax Rates: IT Department
- The Income Tax Department confirmed that the proposed Income Tax Bill 2025 does not alter existing tax rates, including LTCG.
- The bill aims to simplify legal language and remove outdated provisions from the current tax law.
- It seeks to replace the Income Tax Act, 1961 with a more modern, tech-friendly framework marking the first complete rewrite of the law.
The Income Tax Department issued a formal clarification on the proposed Income Tax Bill 2025, emphasizing that the bill does not seek to alter any existing tax rates, including those applicable to Long Term Capital Gains (LTCG).
This clarification comes amid widespread media reports and social media speculation suggesting that the bill could introduce changes in LTCG tax rates or eliminate current tax exemptions on equity investments.
“There are news articles circulating on various media platforms that the new Income Tax Bill, 2025 proposes to change tax rates on LTCG for certain categories of taxpayers. It is clarified that the Income Tax Bill, 2025 aims at language simplification and removal of redundant/obsolete provisions”, the department stated in an official post on social media platform X.
“It does not seek to change any rates of taxes. Any ambiguity in this respect shall be duly addressed during the passing of the Bill”, the statement further added.
The department reiterated that the bill’s primary objective is to modernize, simplify, and streamline India’s tax laws, making them more understandable and compatible with technological systems. It seeks to replace the Income Tax Act of 1961 in its entirety a significant legislative milestone as it marks the first complete rewriting of the tax law.
The new Income Tax Bill was introduced in the Lok Sabha during the Budget Session in February 2025. It was subsequently referred to a select committee, which recently submitted its report after a detailed review.
The government aims to make the tax framework clearer, user-friendly, and aligned with current economic realities without altering the basic tax structure.
