Question 1

The new Income-Tax Bill 2025 changes the tax slabs and lowers the tax rates for the middle class.

Accepted Answer

The 2025 Bill retains the exact same tax rates, slabs, and regimes as the previous framework. Its purpose is purely structural and procedural simplification.

Question 2

The concept of the financial year has been shifted to align with the calendar year (January to December).

Accepted Answer

The accounting period remains April 1 to March 31. The change is strictly terminological: the confusing dual usage of 'Financial Year' and 'Assessment Year' has been replaced by a single term called 'Tax Year'.

Question 3

Consider the following statements regarding the Income-Tax Bill 2025:
1. It introduces a flat tax rate system, completely overhauling the previous progressive tax slabs.
2. It merges the traditional concepts of 'Financial Year' and 'Assessment Year' into a single 'Tax Year'.
3. It consolidates all Tax Deducted at Source (TDS) provisions into a single section (Section 393).
How many of the statements given above are correct?

Accepted Answer

(b) Only two — Statement 1 is incorrect: The Bill fundamentally retains the existing progressive tax rates and slabs, prioritizing structural and linguistic simplification over policy shifts in rates. Statement 2 is correct: The dual concept of Financial Year (FY) and Assessment Year (AY) has been eliminated in favor of a unified 'Tax Year'. Statement 3 is correct: TDS provisions, previously scattered across multiple sections based on income type, are now clubbed under a single Section 393.

Question 4

Match List I (Committees/Task Forces on Tax Reforms) with List II (Their Primary Context/Year):
List I
A. Raja Chelliah Committee
B. Vijay Kelkar Committee
C. Arbind Modi Task Force
D. Akhilesh Ranjan Task Force
List II
1. 2002 Tax Reforms
2. 2019 Revised Direct Tax Code Report
3. 1991 Comprehensive Tax Reforms
4. 2017 Direct Tax Code Drafting
Select the correct answer using the code given below:

Accepted Answer

(a) A-3, B-1, C-4, D-2 — The Raja Chelliah Committee (1991) laid the foundation for post-liberalization tax reforms (A-3). The Vijay Kelkar Committee (2002) recommended major direct and indirect tax administrative reforms (B-1). The Arbind Modi Task Force was constituted in 2017 to draft a new direct tax legislation (C-4). Akhilesh Ranjan later convened the task force and submitted the finalized recommendations in 2019 (D-2).

Question 5

Assertion (A): The Income-Tax Bill 2025 explicitly grants tax authorities the power to override access codes and search virtual digital spaces.
Reason (R): The Bill expands the definition of undisclosed income to include Virtual Digital Assets (VDAs) such as cryptographically generated tokens.
Select the correct answer from the codes given below:

Accepted Answer

(a) Both A and R are correct and R is the correct explanation of A — Assertion (A) is correct as the new Bill modernizes search and seizure powers to include virtual spaces. Reason (R) is also correct and directly explains (A). Because virtual digital assets (VDAs) are now legally recognized as potential 'undisclosed income', tax authorities require the corresponding investigative power to access digital wallets and override access codes to enforce the law and seize hidden digital wealth.

Introduction of the Income-Tax Bill 2025 in Lok Sabha

CJI B.R. Gavai Recommends Justice Surya Kant as Successor