The Income-tax Bill, 2025was tabled in Parliament today, marking a significant step toward simplifying the language and structure of the Income-tax Act, 1961.

The simplification exercise was guided by three core principles:

1. Textual and structural simplification for improved clarity and coherence.
2. No major tax policy changes to ensure continuity and certainty.
3. No modifications of tax rates, preserving predictability for taxpayers.

A three-pronged approach was adopted:

• Eliminating intricate language to enhance readability.
• Removing redundant and repetitive provisions for better navigation.
• Reorganizing sections logically to facilitate ease of reference.

Consultative and Research-Based Approach

The Government ensured widespread stakeholder engagement, consulting taxpayers, businesses, industry associations, and professional bodies. Out of 20,976 online suggestions received, relevant suggestions were examined and incorporated, where feasible. Consultations were held with industry experts and tax professionals and simplification models from Australia and the UK were studied for best practices.

Outcomes of the Simplification Exercise Quantitative

Impact

The review has led to a substantial reduction in the Act’s volume, making it more streamlined and navigable. Key reductions are summarized below:

Item	Existing  Income-tax Act, 1961	Proposed in the Income-tax Bill, 2025	Change (Reduction/Addition)
Words	512,535	259,676	Reduction: 252,859 words
Chapters	47	23	Reduction: 24 chapters
Sections	819	536	Reduction: 283 sections
Tables	18	57	Addition: 39 tables
Formulae	6	46	Addition: 40 formulae

Qualitative Improvements

• Simplified language, making the law more accessible.
• Consolidation of amendments, reducing fragmentation.
• Removalofobsoleteandredundantprovisionsfor greater clarity.
• Structural rationalization through tables and formulae for improved readability.
• Preservation of existing taxation principles, ensuring continuity while enhancing usability.

The Income-tax Bill, 2025 reflects the Government’s commitment to enhancing ease of doing business by providing a tax framework that is simple and clear.

Tax law simplification improves statutory clarity and navigability while preserving existing tax policy and rates. The Bill undertakes statutory consolidation and clarity reforms to the Income-tax Act by textual and structural simplification, consolidating amendments, removing obsolete and redundant provisions, and reorganising sections into tables and formulae for improved navigability, while expressly preserving existing tax policy and rates; the exercise was consultative and research-based and reports substantial reductions in textual volume alongside additions of tabular and formulaic aids.