New Revenue Tax Invoice is thru, will change six-decade-old Revenue Tax Act

Parliament on Tuesday handed the brand new earnings tax invoice, to switch the six-decade-old Revenue Tax Act, 1961, which seeks to make direct tax regulation simpler to learn, perceive and implement.

The Rajya Sabha returned the laws to the Lok Sabha with a voice vote as a part of the parliamentary process.

The brand new invoice introduces the idea of a “tax yr”, changing the monetary yr and evaluation yr to scale back confusion. It additionally broadens the definition of ‘digital digital belongings' to incorporate crypto-assets, non-fungible tokens and different digital belongings as specified by the federal government.
The invoice additionally makes it obligatory for taxpayers to offer entry to digital areas akin to social media accounts, electronic mail servers and cloud storage throughout a search operation.

Finance minister Nirmala Sitharaman stated that the Central Board of Direct Taxes (CBDT) will subject normal working procedures on dealing with digital information throughout searches to guard taxpayer privateness. She additionally stated that the pc programs should be “rebooted” for the brand new regulation by April 1, 2026.

“These modifications are usually not superficial, they mirror a brand new simplified method to tax administration and the leaner and extra targeted regulation is designed to make it simple to learn, perceive and implement,” she stated, responding to the dialogue within the higher home.She slammed the opposition for not collaborating within the dialogue on such an necessary laws after agreeing to 16 hours of debate on the invoice in each homes within the Enterprise Advisory Committee.”I'm shocked that the opposition would not need to take part,” Sitharaman stated.Opposition events staged a walkout within the Rajya Sabha on Tuesday, as that they had carried out within the Lok Sabha on yesterday.

The invoice had already been handed by the Lok Sabha.

Sitharaman stated that it is very important move the invoice on time because the earnings tax division has to improve its pc system and there's very much less time as the federal government has to implement the brand new regulation from April 1 subsequent yr.

The finance minister additionally launched the Taxation Legal guidelines (Modification) Invoice, 2025, which was handed by the Rajya Sabha, to offer tax exemption to public funding funds of the Kingdom of Saudi Arabia and its subsidiaries, tax exemption for partial withdrawal of subscribers of the Unified Pension Scheme to make it extra engaging and alter the definition of ‘earnings' in block assessments throughout search and seizure circumstances.

These modifications are included within the new earnings tax invoice. “Usually taxation amendments are carried out with finance payments, we might anticipate the finance invoice (subsequent yr), however due to the financial system everyone desires to have it in a short time… Take a look at how issues are growing,” Sitharaman stated.