The New Income Tax Bill: Opportunities For New Indian Businesses

By – Anil Talreja, Partner, Deloitte India

It was a watershed moment when the Honorable Finance Minister tabled; “The new Income tax Bill, 2025” (new tax bill). The themes which provided the foundation to this new piece of tax legislation include – “Trust first and Scrutinize later” and “Concise, Lucid, Easy to read and understand’. The guiding light from the legislation is provided by four lamps -i. Reducing the number of sections, words, pages and Chapters ii. Simplifying the tax law by eliminating redundancies and cross referencing; iii. Consolidating the provisions pertaining to one unit at one place and iv. Bringing in maximum scope for multiple interpretation.

Let’s first look at a few key statistics which are testimony of the assertions made by the Government: The new tax bill lays down a comprehensive framework with 23 chapters encapsulating 536 sections with nearly 2.60 lakh words. The existing Act contained 47 chapters spanning across 819 sections with nearly 5.12 lakh words. It is the solution to more than 4000 amendments made in the past 60+ years. More than 1200 provisos and 900 explanations have been removed with simplified content placed as sub-sections/ clauses.

So when does this apply from and what happens to matters overflowing from the existing tax law? The new tax bill is proposed to be effective from 1 April 2026. Further, it introduces concept of ‘tax year’ against current dual concepts of ‘assessment year’ and ‘previous year’. This aligns with global best practices and streamlines all compliances and procedural matters. The existing Act to be repealed with savings clauses in specific instances. Any agreement entered, appointment made, approval given, recognition granted, direction, instruction, notification, order or rule to the extent not in variance with the New Bill to continue in force under the New Tax Bill

Are there any substantive changes introduced in the new tax bill? There are no changes in tax rates, tax residency or other substantive income charging provisions. The existing provisions are kept consistent under New Bill – aligns with sole intent to simplify the framework.

The amendments proposed vide Budget 2025 have been incorporated – the New Bill to this extent represents an updated set of document consolidating all relevant and applicable income-tax provisions

Any unintended misses? Yes one of them is on forex fluctuation on the capital gains tax for non residents - Non-residents are not entitled to claim forex fluctuation benefit on sale of Indian company shares. It appears that the new provisions may enable a claim for such benefit. This could be an important benefit for non-residents considering the depreciation in the Rupee. However, it may be unintended, and therefore it should be evaluated as the bill goes through the Select Committee reviews.

Another one is on demerger provisions: Demergers are defined as arrangements under Section 230-232 of the Companies Act, 2013, however the new tax bill does not contain any reference to Section 233 for fast-track mergers.

One of the objectives of the introduction of the new tax bill is to improve the ease of doing business in India. Foreign Direct Investment is not just about capital inflow. It is about fostering sustainable, long-term partnerships that benefit both India and its investing partners. As India continues its transformation into a global economic leader, FDI plays a critical role. As India strengthens its economic foundations, enhances competitiveness, and positions itself as an engine of global growth, the next few decades are set to be India’s time to shine and such new regulations and laws will enable it to shine.

(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)