Question of the Day – REVISED INCOME TAX BILL, 2025
QOTD April 29,2026
Consider the following statements regarding the Revised Income Tax Bill, 2025
- It replaces the Income-tax Act, 1961
- It introduces the concept of ‘Tax Year’ replacing Assessment Year and Previous Year
- It makes major changes in tax rates for individuals and corporations
Which of the above statements are correct
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer: (a) 1 and 2 only
Explanation:
Statement 1 is correct
The new law is intended to replace the Income-tax Act, 1961 with a modern framework
Statement 2 is correct
It introduces a single concept of ‘Tax Year’ to simplify tax terminology
Statement 3 is incorrect
The reform largely avoids major changes in tax rates and focuses on simplification and restructuring
Why in news–
The Revised Income Tax Bill, 2025 has been passed by Parliament to replace the six-decade-old Income-tax Act, 1961 with a simpler, modern, and more transparent tax framework. The reform aims to reduce complexity, improve compliance, and align India’s taxation system with contemporary economic realities without significantly changing the existing tax structure.
There are more questions from this topic that you should practice to make your concepts stronger.
Practice Questions (PQ)
PQ1.Consider the following statements
- The new Act reduces complexity by removing redundant provisions
- It increases the number of sections compared to the 1961 Act
- It focuses on improving ease of compliance
Which of the statements are correct
(a) 1 and 3 only
(b) 2 and 3 only
(c) 1 and 2 only
(d) 1, 2 and 3
Answer : (a) 1 and 3 only
Explanation:
Statement 1 is correct
The Act removes obsolete provisions and simplifies language
Statement 2 is incorrect
The number of sections has been reduced significantly making the law simpler
Statement 3 is correct
Ease of compliance and transparency are key objectives
PQ2. Consider the following statements regarding features of the Revised Income Tax Bill, 2025
- It promotes faceless and digital tax administration
- It introduces taxation of virtual digital assets
- It abolishes all previous tax regimes completely
Which of the statements are correct
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer: (a) 1 and 2 only
Explanation:
Statement 1 is correct
The Act emphasizes digital and faceless compliance systems
Statement 2 is correct
It clearly defines and includes virtual digital assets under taxation
Statement 3 is incorrect
Existing tax structures are largely retained with continuity
PQ3.Consider the following statements
- The Revised Bill aims to reduce tax litigation
- It reorganizes provisions into a more logical structure
- It eliminates all deductions and exemptions
Which of the statements are correct
(a) 1 and 2 only
(b) 1 only
(c) 2 and 3 only
(d) 1, 2 and 3
Answer: (a) 1 and 2 only
Explanation:
Statement 1 is correct
Simplification and clarity are intended to reduce disputes
Statement 2 is correct
Provisions are reorganized logically for better understanding
Statement 3 is incorrect
Deductions and exemptions are rationalized not eliminated
Previous Year Question (UPSC Prelims)
Consider the following statements regarding direct taxes in India (UPSC Prelims 2018 similar theme)
- Taxation powers of the Union and States are defined in the Constitution
- Corporation tax is a direct tax
- Goods and Services Tax is a direct tax
Which of the statements are correct
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer: (a) 1 and 2 only
Explanation:
Statement 1 is correct
The Constitution clearly demarcates taxation powers between Union and States
Statement 2 is correct
Corporation tax is levied directly on company income
Statement 3 is incorrect
GST is an indirect tax on goods and services not a direct tax
