No Proposed Change in Capital Gains: New Income Tax Bill Focuses on Simplification [Read Bill]

The new Income Tax Bill 2025 is set to bring structural and procedural changes. However, one key aspect remains unchanged: capital gains taxation is not be modified. The Bill retains the current tax rates for both Short-Term Capital Gains ( STCG ) and Long-Term Capital Gains ( LTCG ), ensuring continuity for investors and businesses.

No Change in Capital Gains Tax

The bill makes no changes to capital gains tax rates.

• STCG on stocks, equity funds, and business trust units ( InvITs, REITs ) will still be taxed at 20%, as revised in the July 2024 Budget ( earlier 15% ).
• LTCG will continue to be taxed at 12.5% across all asset classes.
• The existing rules governing capital gains tax under Sections 45-55 of the Income Tax Act, 1961, remain the same.

Complete Notifications and Circulars on Capital Gain Taxation, Click Here

Simpler and More Transparent Tax Rules

The Income Tax Bill focuses on simplification and clarity. Some key changes include:

• New tax terms:
  • “Tax Year” will replace “Assessment Year.”
  • “Financial Year” will replace “Previous Year.”
• Income classifications are now moved to schedules for easy reference.
• Deductions (such as EV purchases, medical, and education expenses) are now grouped together instead of being scattered across different sections.

More Power to CBDT & Stronger Compliance Rules

The Central Board of Direct Taxes ( CBDT ) will have greater authority to frame tax rules, similar to the GST system.

• Civil courts cannot interfere in tax matters, making direct tax administration more independent.
• Crypto transactions (Clause 509) now require detailed reporting.
• Annual Information Statement ( AIS ) (Clause 510) will improve taxpayer transparency.
• International tax compliance (Clause 511) will strengthen the monitoring of cross-border transactions.

The Income Tax Department received 6,500 public suggestions to make tax laws simpler. The bill is expected to be tabled in Parliament tomorrow (13.02.2025). The first phase of the Budget session ends on February 13. The next phase is from March 10 to April 4.

To Read the full text of the Bill CLICK HERE

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