Finance Minister Nirmala Sitharaman on Tuesday reiterated that the tax relief measures announced in Budget 2025 were a reflection of Prime Minister Narendra Modi’s commitment to acknowledging the vital role taxpayers play in the process of nation-building. Speaking at the Budget Round Table 2025 event organized by India Today and Business Today, Sitharaman emphasized that the government has consistently engaged with taxpayers over the past few years, ensuring that their trust remains intact through various initiatives and reforms aimed at making taxation more transparent and efficient.
“In the last three or four years, we have continuously engaged with taxpayers, understanding their concerns and addressing them to maintain confidence in the system. The steps we have taken are a part of this engagement, and this particular tax relief is an extension of Prime Minister Modi’s effort to respect and honor the service that taxpayers are doing for nation-building,” she said.
During her Budget speech, Sitharaman had announced significant tax relief measures under the new tax regime, including revised income tax slabs, reaffirming the government’s commitment to gradually transitioning taxpayers toward the new system. The Finance Minister emphasized that the government’s goal is to simplify taxation and reduce compliance burdens while encouraging more individuals and businesses to shift to the new regime.
However, addressing concerns regarding the parallel existence of both the old and new tax regimes, she clarified that the government does not intend to abruptly phase out the old system. “As long as there are people who wish to continue enjoying exemptions and deductions under the old regime, they are free to do so. I don’t have any proposal to shut it down before it naturally phases out,” she stated.
Sitharaman also highlighted the government’s efforts to modernize and simplify the tax structure through the development of a new income tax law that will replace the existing framework, which has been in place since 1961. She pointed out that the current tax system has undergone numerous amendments and modifications over the decades, making it overly complicated and difficult for individuals and businesses to navigate.
"The system as a whole needs to be simplified, and that is why we are working on a new Income Tax Act to replace the old one. The current Act, which has existed since 1961, has become bulky and convoluted due to multiple additions over the years. Compliance has become challenging as taxpayers have to cross-reference various pages and sections, leading to confusion and inefficiencies," Sitharaman explained.
The upcoming tax law aims to streamline the taxation process, eliminate unnecessary complexities, and make compliance more straightforward for taxpayers. "The new Act will ensure that taxpayers don’t have to struggle with outdated provisions or ambiguous rules. It will be more direct, transparent, and easy to understand," she added.
The Finance Minister’s remarks come at a crucial time as the government seeks to strike a balance between fostering economic growth and ensuring a taxpayer-friendly environment. With India’s growing digital economy, rapid industrialization, and evolving global financial landscape, tax reforms are expected to provide much-needed clarity and predictability for businesses and individuals alike.
By introducing tax relief measures and working towards a simplified taxation system, the government is not only incentivizing compliance but also creating a more efficient and equitable fiscal framework that aligns with its long-term economic vision. Sitharaman concluded by reaffirming the government’s dedication to continuously engaging with taxpayers and addressing their concerns while ensuring that India’s taxation policies remain robust, progressive, and conducive to economic growth.
