New Income Tax Bill Section 80C: After the implementation of the new bill, as expected, taxpayers will have to be ready for many changes. However, it will take some time to become a law as this bill has been sent to the selection committee first.
New Income Tax Bill: Finance Minister Nirmala Sitharaman has introduced the new Income Tax Bill 2025 in the Lok Sabha today i.e. on Thursday. In the new bill, the government has emphasized on simplification of laws. The new law will replace the old Income Tax Act 1961, which has become outdated at present and has become very complicated due to frequent amendments.
After the implementation of the new bill, as expected, taxpayers will have to be ready for many changes. However, it will take some time to become a law as this bill has been sent to the selection committee first. The government has said that a select committee will be constituted on the Income Tax Bill, which will submit its report on the first day of the next session.
Section 80C now in clause 123
It is not possible that any taxpayer is not aware of Section 80C of Income Tax. Equity-linked Saving Scheme (ELSS), Public Provident Fund (PPF), life insurance premium, National Pension System (NPS) or other tax saving deposits come under this section. Under this, exemption of up to 1.5 lakh is available.
In the new bill, this exemption is under section 123
In the new bill, such deductions will be kept under section 123. According to the bill, “Any individual or Hindu Undivided Family (HUF) will be entitled to get a deduction of the entire amount paid or deposited in that tax year. However, this amount will be up to a maximum of Rs 1,50,000.
According to Mayank Mohanka, founder-director of tax consultancy firm TaxAaram.com, section 123 given in the new Income Tax Bill will be similar to section 80C of the existing Income Tax Act, 1961. It should be read with Schedule XV, which gives detailed information about the tax exemption available under Section 80C.
Will be implemented from April 1, 2026
The number of sections has been reduced from 819 to 536 in the new Income Tax Bill 2025. In this, unnecessary exemptions have been abolished and the total word count in the new bill has been reduced from 5 lakh to 2.5 lakh. The new Income Tax Bill focuses on making things easier Also, ‘assessment year’ will be replaced by ‘tax year’. The new tax law will come into force from 01 April 2026.
After being introduced in the Lok Sabha, the new law will be sent to the Parliamentary Standing Committee on Finance for further deliberations. The bill will not change the existing tax slabs or reduce the tax exemptions given. Instead, the new law aims to make the six-decade-old law compatible with the current times.
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