New Income Tax Bill 2025 introduced in Parliament: What are the top Parliamentary panel suggestions being included? Check details

The Income-Tax Bill, 2025 was designed to replace and simplify India’s taxation system.

New Income Tax Bill 2025: Finance Minister Nirmala Sitharaman has introduced modified New Income Tax Bill 2025 in Parliament on Monday. The authorities had formally withdrawn the Income-Tax Bill, 2025 on Friday, which had been offered in the Lok Sabha on February 13 this yr as a substitute for the present Income-Tax Act, 1961.The Income-Tax Bill, 2025 was designed to replace and simplify India’s taxation system, changing laws that had been in impact for over 60 years. The proposal included a revised construction, provisions for digital taxation, methods for resolving disputes, and initiatives to develop tax assortment by means of technological and data-driven strategies.The parliamentary committee’s suggestions on the draft necessitated a number of modifications.A brand new model, which incorporates the majority of 285 suggestions supplied by the Parliamentary Select Committee led by BJP MP Baijayant Panda, was offered on Monday, August 11.While presenting The Income-Tax (No.2) Bill, 2025, Sitharaman defined that this laws goals to streamline and replace earnings tax rules, changing the current Income Tax Act, 1961.“Almost all of the recommendations of the Select Committee have been accepted by the government. In addition, suggestions have been received from stakeholders about changes that would convey the proposed legal meaning more accurately,” said the invoice’s targets and reasoning part.“There are corrections in the nature of drafting, alignment of phrases, consequential changes and cross-referencing. Therefore, a decision has been taken by the government to withdraw the Income-tax Bill, 2025 as reported by the Select Committee. Consequently, Income-tax (No. 2) Bill, 2025 has been prepared to replace the Income-tax Act, 1961,” the assertion indicated.According to an ET report, officers indicated that the withdrawal was essential to keep away from any confusion which may come up from a number of variations circulating, and to current a single complete draft incorporating all permitted adjustments.

New Income Tax Bill 2025: Top suggestions of Parliamentary Select Committee

The Parliamentary Select Committee, comprising 31 members, offered their complete 4,575-page findings final month. Their suggestions embrace each small changes and 32 important modifications.The principal suggestions put ahead embrace:* A revised definition of “beneficial owner” has been proposed, enabling people to hold ahead losses once they obtain direct or oblique share advantages throughout the tax yr.* The committee advocates reinstating the inter-corporate dividend deduction, which was absent in the preliminary draft. Additionally, they counsel implementing a typical 30% deduction, calculated after municipal tax deductions, while pre-construction curiosity deductions might be prolonged to incorporate let-out properties.To simplify tax compliance for particular person taxpayers, the suggestions embrace:* Issuing ‘Nil’ tax deduction certificates* Allowing discretionary waiver of penalties for unintentional non-compliance* Facilitating refunds in delayed ITR submissions for small taxpayers* The committee has moreover requested enhanced readability relating to the definition of non-performing belongings (NPAs) to minimise extended disagreements in tax and banking interpretations.The proposal advocates for exact definitions of “parent company” while establishing applicable provisions for non-profit organisations and religious-cum-charitable trusts. The committee means that nameless contributions shouldn’t have an effect on their eligibility for tax exemptions.Additionally, it really helpful eliminating remaining references to the Income-Tax Act, 1961, to create a complete and dispute-resistant new code.