New Income Tax Bill 2025: March towards simplification

This Tax Alert summarizes key changes that are proposed in the recently tabled Income Tax Bill 2025 (ITB 2025) in Parliament. The intent of the newly introduced ITB 2025 is to make the income tax law simple, straightforward, minimize litigation and remove redundant provisions in the existing Income-tax Act 1961 (ITA 1961). ITB 2025 is accordingly intended to be aligned with ITA 1961 on all substantive policy aspects like residency rules, scope of total income, computation and heads of income, assessment provisions, etc. However, in the process of redrafting for simplicity or reducing litigation, certain changes having significant impact are reflected in the provisions of ITB 2025 vis-à-vis ITA 1961. This Tax Alert summarizes such key changes in corporate taxation, personal taxation, transfer pricing, corporate reorganization, and procedural provisions.