How small and salaried taxpayers will benefit from the new Income Tax Bill 2025

It has long been thought of as an annual hassle to file income tax returns. Numerous salaried individuals and small taxpayers were overwhelmed by the copious amounts of paperwork, dispersed parts, and dense verbiage. However, by making tax filing easier, more transparent, and less time-consuming, the New Income Tax bill, 2025, aims to change that.

IndiaToday.in interviewed Sudhir Kaushik, co-founder and CEO of Taxspanner, and CA (Dr) Suresh Surana to find out how the new law will make compliance easier for regular taxpayers.

SALARIED INDIVIDUALS’ EASIER RETURN FILING

The restructuring of provisions pertaining to salaries is one of the most significant revisions. In the past, taxpayers had to search through several sections in order to find retirement benefits, deductions, or allowances. Now, everything has been consolidated into a single chapter, presented in straightforward language and easy-to-read tables.

“The goal of the Income Tax Act’s simplification is to improve clarity and compliance ease so that taxpayers can comprehend and file their returns on their own,” Dr. Surana stated.

The word count for “Salaries,” which was 4,401 words long, has been drastically trimmed to 3,420 words. Additionally, he said, “the language has been simplified, with minimal legal and technical jargon, and key terms like perquisite, profit in lieu of salary, and standard deduction have been clarified.”

SMALL TAXPAYERS NEED TO DO LESS PAPERWORK

Compliance for small taxpayers frequently required generating mountains of paperwork for each source of income or deduction. This burden is lessened by the new regulations, which move toward uniformity and clarity.

“Small taxpayers may experience less paperwork, fewer disputes, and greater certainty as the emphasis shifts from extensive documentation to compliance based on clearly defined statutory provisions,” Dr. Surana said.

Additionally, Sudhir Kaushik noted that pre-populated data from banks and companies will reduce the need for additional proofs. He claimed that this lowers the possibility of human entry errors and facilitates the proper and timely filing of returns by salaried personnel.

EXEMPTIONS AND CLEARER DEDUCTIONS

Because tax laws are dispersed and complicated, tax planning has always been difficult. This is what the new law aims to address. The exemptions that were previously listed under Section 10 have been redrafted into six schedules, each of which contains tabular information.

This eliminates out-of-date exemptions and enhances readability. “Complex provisions like Section 80C have been simplified in the Income Tax Bill, 2025, with specific provisions moved to a separate schedule for better clarity,” Dr. Surana stated.

“Under various sections, including 80C, 80D, and house rent allowances, the law clearly specifies eligible deductions, exemptions, and limits,” Kaushik continued. This eliminates uncertainty and assists salaried staff in making well-informed tax planning decisions.

ASSISTANCE FOR NEW TAXPAYERS

The tax system may seem complex to newcomers. The revised Bill uses simpler language in an attempt to make it more approachable. For instance, the more straightforward “tax year” has taken the role of “previous year” and “assessment year.”

Now that all of the important definitions are in one location, they are simpler to locate. According to Surana, “this Bill introduces the Taxpayer’s Charter, which outlines taxpayer rights and duties, helping newcomers navigate the process with greater confidence.”

“First-time taxpayers can better comprehend the filing process thanks to simplified forms, clear step-by-step instructions, and pre-filled information,” Kaushik said.

WORK TO INCREASE VOLUNTRAY COMPLIANCE

The modifications are intended to encourage more people to voluntarily submit taxes in addition to saving time. According to Surana, a 48-month window for updated returns, a larger zero-tax threshold of up to Rs 12 lakh (under certain conditions), and simpler refund procedures could all contribute to the development of confidence.

“The Bill greatly lowers the complexity of compliance by streamlining the statutory language. According to Dr. Surana, these modifications might improve the system’s perceived fairness, which is a crucial component in encouraging reluctant people to file voluntarily.

Kaushik further noted that steps like increasing TDS and TCS and monitoring significant cash transactions will eventually contribute to improved adherence.

Reduced expenses and filing time

Taxpayers no longer have to rely as much on experts because the majority of the information is pre-filled and the forms are simplified. Time and money are immediately saved as a result.

“Taxpayers can file accurately without professional assistance in most cases, resulting in overall efficiency and convenience,” Kaushik emphasised.

A FIRST STEP IN THE DIRECTION OF A FRIENDLY TAX SYSTEM

One important step in reducing the anxiety associated with tax compliance is the Income Tax Bill, 2025.

By reducing jargon, cutting down paperwork, and presenting information in a simple and structured way, it ensures that taxpayers, whether first-timers or experienced, can file returns with more confidence.

As the experts note, the law is not only about simplifying forms but also about building trust and fairness in the system, which may encourage more people to come under the tax net in the years ahead.