After Finance Minister Nirmala Sitharaman tabled Earnings Tax Invoice 2025 within the Parliament, a number of consultants and taxpayers supported the transfer. Nonetheless, some expressed their reservations about it.
Nirmala Sitharaman tabled Earnings Tax Invoice 2025 on Thursday, February 13.(Sansad TV)
Sanjay Tolia, Companion at PwC, stated the invoice goals to simplify the nation’s tax system with out making vital modifications to the present regulation. “Overall, this marks a transition towards a more modern tax system for both taxpayers and the administration,” Tolia stated.
Alternatively, Vivek Jalan, Companion at Tax Join Advisory Providers, expressed doubt over the usefulness of the introduction of the ‘tax year’ idea within the invoice.
“Due to the concept of ‘tax year’, there might be questions whether the period April 1, 2026 to March 31, 2027 would be in conflict between old and new acts. However, this is not to be as it will be Assessment Year 2026-27 of the Income-tax Act, 1961 and will pertain to the income of a taxpayer for the previous year 2025-26 and not to the income of the financial year 2026-27; It will be the tax year 2026-27 of the new Act. It will pertain to the income of a taxpayer for the financial year 2026-27,” Jalan stated.
Anand Rathi Wealth’s Deputy CEO Feroze Azeez stated, “The government has also lived up to its promise of not making substantial changes compared to the existing law and most of the laws remain unchanged.”
He added, “As you’ve heard us voice the need and expectation for simplification, that dream now seems to be turning into reality.”
“Stakeholders must carefully review the changes to understand their implications and plan for seamless compliance with the updated regulations,” stated Anshul Khemuka, Companion at Khaitan and Co.
What the invoice modified?
The brand new invoice has simplified terminology and diminished the size and the bulkiness of the Earnings Tax Act 1961. It additionally eliminated privisos and explanations and has made referencing related. This can be a main step as typically, taxpayers would get confused or might even be liable to fraud over their lack of correct understanding of the tax legal guidelines in India.
A significant change is the introduction of the ‘tax year’ idea and the elimination of the ‘previous year’ and ‘assessment year’ ideas.