Simplify Your Taxes: New Bill Introduces Clear ‘Tax Year’ Concept

The upcoming Income Tax Bill 2025, expected to be introduced in Parliament on February 13, 2025, will bring in the concept of ‘tax year’ to replace the terms ‘assessment year’ and ‘previous year’. The ‘tax year’ will be defined as a 12-month period starting on April 1, which aligns the income earned with the reporting period. This change will do away with the current system where income earned in one financial year is assessed in the subsequent assessment year. For new businesses, the tax year will commence from their establishment date and conclude with the financial year. This simplification is intended to make tax reporting more straightforward and could pave the way for more flexible income tax regimes in the future.

Source: The Indian Express, NDTV, CNBC TV18