No Change in Tax Rates in Income Tax Bill 2025, Confirms IT Department

Amid rising speculation regarding the proposed Income Tax Bill 2025, the Income Tax Department has issued a clear clarification: there will be no changes to current tax rates, including Long Term Capital Gains (LTCG) tax, under the new legislation.

The department responded after several media outlets and social media posts suggested that the new bill may alter LTCG tax rates for specific taxpayer categories and potentially remove tax exemptions for equity investments.

“There are news articles circulating on various media platforms that the new Income Tax Bill, 2025 proposes to change tax rates on LTCG for certain categories of taxpayers. It is clarified that the Income Tax Bill, 2025 aims at language simplification and removal of redundant/obsolete provisions,” the Income Tax Department said in an official post on social media platform X (formerly Twitter).

“It does not seek to change any rates of taxes. Any ambiguity in this respect shall be duly addressed during the passing of the Bill,” the department added.

Purpose of the Income Tax Bill 2025

Simplifying India's Tax Law Framework

The proposed Income Tax Bill 2025, introduced during the Budget Session in February 2025, is not about altering tax liabilities but streamlining the legal text.

According to the IT Department, the objective is to:

• Modernize tax language to make it user-friendly

• Remove obsolete or redundant clauses

• Increase compatibility with digital and AI-based tax filing systems

• Enhance transparency and predictability in tax administration

A Historic Overhaul

This marks the first comprehensive rewrite of India’s income tax legislation since the Income Tax Act of 1961 was introduced over six decades ago. Following its tabling in Parliament, the bill was reviewed by a select committee of the Lok Sabha, which has now submitted its report.

No Impact on Current Taxpayers

Tax Structure Remains Intact

The reassurance from the Income Tax Department confirms that:

• There will be no changes in LTCG tax rates

• Existing tax exemptions, including those on equity investments, will remain unchanged

• Any future changes, if proposed, will be discussed transparently in Parliament

This clarification comes as a relief to investors, salaried individuals, and financial professionals who were concerned about sudden policy shifts impacting their tax planning.

Conclusion

The Income Tax Bill 2025 marks a significant move toward building a simpler, clearer, and more efficient tax system for India. Contrary to the speculation and misleading reports circulating across media platforms, the government has categorically clarified that no changes are being made to existing tax rates, including Long Term Capital Gains (LTCG) and exemptions on equity investments.

This assurance brings much-needed relief to taxpayers, investors, and financial planners who were concerned about abrupt policy shifts.

The primary objective of the bill is to modernize the language, remove outdated provisions, and align the tax code with today’s digital ecosystem, making it easier to comply with and interpret.

By replacing the archaic Income Tax Act of 1961, this new framework aims to streamline operations and reduce confusion for both taxpayers and authorities. The bill represents reform without disruption, ensuring that the tax burden remains stable while the system becomes more transparent and user-friendly.