Updated 07:28 IST, February 3rd 2025
Budget 2025: New Income Tax Bill to Introduce 'Trust First, Scrutinize Later' Approach
Finance Minister Nirmala Sitharaman unveils plans to simplify India's Income Tax laws with a new bill in the upcoming Budget session.

In a bold move aimed at simplifying India's Income Tax regime, Finance Minister Nirmala Sitharaman announced during the Union Budget 2025 presentation the introduction of a new Income Tax Bill. This reform is set to significantly streamline the current tax laws, making them more accessible for both taxpayers and administrators.
The new Income Tax Bill is designed to be more concise and user-friendly than its predecessor. According to Sitharaman, it will contain approximately 50% less text in terms of chapters and words compared to the existing law. This reduction aims to eliminate ambiguities and enhance clarity, thus reducing the scope for litigation.
'Trust First, Scrutinize Later' Approach
Highlighting a shift in approach, the Finance Minister emphasized a 'trust first, scrutinize later' philosophy. This strategic pivot aims to build trust between taxpayers and the tax department, fostering a smoother compliance process while ensuring robust scrutiny where necessary.
‘Continuing these efforts, I reaffirm the commitment of the tax department to “trust first, scrutinize later”. I also propose to introduce the new income-tax bill next weel,’ the FM said.
Benefits for Taxpayers
The streamlined language of the new bill intends to make tax obligations clearer for individual taxpayers and businesses alike. By simplifying the tax regime, the government aims to reduce compliance burdens and improve overall tax administration efficiency.
Government's Vision and Commitment
Sitharaman reiterated that the new bill aligns with the government's vision of a developed India ('Viksit Bharat') and its commitment to justice ('Nyaya'). This legislative reform mirrors earlier legal updates like the Bharatiya Nyaya Sanhita, underscoring a commitment to straightforward and effective governance.
‘In respect of criminal law, Our Government had earlier ushered in Bharatiya Nyaya Sanhita replacing Bharatiya Danda Sanhita. I am happy to inform this August House and the country that the new income-tax bill will carry forward the same spirit of “Nyaya”. The new bill will be clear and direct in text with close to half of the present law, in terms of both chapters and words. It will be simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation,' FM said
As India prepares for the Budget session, the introduction of the new Income Tax Bill stands out as a pivotal reform aimed at modernizing and simplifying tax laws. With its promise of clarity, reduced litigation, and enhanced tax certainty, the bill signals a positive step towards a more efficient and equitable tax system.
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Published 11:54 IST, February 1st 2025