Finance Minister Nirmala Sitharaman may introduce the New Income Tax Bill 2025 in the Lok Sabha on Thursday, February 13, 2025. Earlier, the government released the draft of the Income Tax Bill on Wednesday. The purpose of this bill is to make several changes in the language of the Income Tax Act to simplify it. The biggest change is that the term 'tax year' will be used instead of 'financial year' or 'assessment year' for tax calculation.

This bill states which and what kind of income will not be considered as part of the total income at the time of tax calculation. Many rules have been made for this.

Which income will not be part of the total income?

Chapter 3 of the new Income Tax Bill states that income will not be part of your total income.

The income falling under the categories mentioned in Schedules 2, 3, 4, 5, 6, and 7 of the Bill will not be considered as part of the total income for calculating tax. Rather, it will be calculated separately according to the rules mentioned in the schedule. This includes income from agriculture, money coming from insurance, and income from PF, etc.

However, it has been stated in the Bill that if the conditions set for the categories mentioned in the schedule are not fulfilled in any tax year, then the tax on them will be calculated according to the tax rules of that year.

The Central Government can make rules for Schedules 2, 3, 4, 5, 6, and 7 of the Bill from time to time. It can issue new notifications for them. It can also define the tax rate on different types of income falling into these schedules.

The income of political parties and electoral trusts will not be included in the total income. While calculating the total income of a political party or electoral trust, the rules of Schedule 8 of the bill will be applicable.

Schedule 8 states that political parties will have to keep track of their income from property, capital gains etc. If they take electoral bonds of more than Rs 20,000, then they will have to keep a record of it. They cannot accept donations of more than Rs 2,000, if they do so, then they will have to keep a record of it.

Here electoral bonds mean the same bonds that have been defined by the Reserve Bank of India. This is different from the recently introduced electoral bond scheme. You can download the draft of the new bill from here.

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