New Delhi: Finance Minister Nirmala Sitharaman introduced a new Income Tax Bill in Lok Sabha on Thursday, aiming to replace the existing legislation.

The proposed bill seeks to simplify and revamp the Income Tax Act of 1961, which has been criticised for its complexity, making it difficult for ordinary taxpayers to navigate.

The new version consists of 23 chapters, 16 schedules, and approximately 536 clauses—significantly streamlined compared to the current act, which spans 823 pages with 23 chapters, 14 schedules, and 298 sections.

To enhance clarity, the bill adopts simpler language, eliminating complicated legal jargon. One key change is the introduction of the term ‘Tax Year’ in place of ‘Assessment Year’, which has often caused confusion among taxpayers.

Following the bill's introduction, Sitharaman proposed referring it to a select committee.

Lok Sabha Speaker Om Birla is expected to announce the committee members soon.

According to sources, the committee is required to submit its report during the monsoon session.