New Income Tax Bill 2025 introduced in Parliament: What are the top Parliamentary panel suggestions being included? Check details
New Income Tax Bill 2025: Finance Minister Nirmala Sitharaman has introduced modified New Income Tax Bill 2025 in Parliament on Monday. The government had officially withdrawn the Income-Tax Bill, 2025 on Friday, which had been presented in the Lok Sabha on February 13 this year as a replacement for the current Income-Tax Act, 1961.The Income-Tax Bill, 2025 was designed to update and simplify India’s taxation system, replacing legislation that had been in effect for over 60 years. The proposal included a revised structure, provisions for digital taxation, systems for resolving disputes, and initiatives to expand tax collection through technological and data-driven methods.The parliamentary committee’s feedback on the draft necessitated several modifications.A new version, which includes the majority of 285 recommendations provided by the Parliamentary Select Committee led by BJP MP Baijayant Panda, was presented on Monday, August 11.According to an ET report, officials indicated that the withdrawal was necessary to avoid any confusion that might arise from multiple versions circulating, and to present a single comprehensive draft incorporating all approved changes.
New Income Tax Bill 2025: Top recommendations of Parliamentary Select Committee
The Parliamentary Select Committee, comprising 31 members, presented their comprehensive 4,575-page findings last month. Their recommendations include both small adjustments and 32 significant modifications.The principal suggestions put forward include:* A revised definition of “beneficial owner” has been proposed, enabling individuals to carry forward losses when they receive direct or indirect share benefits during the tax year.* The committee advocates reinstating the inter-corporate dividend deduction, which was absent in the initial draft. Additionally, they suggest implementing a standard 30% deduction, calculated after municipal tax deductions, whilst pre-construction interest deductions could be extended to include let-out properties.To simplify tax compliance for individual taxpayers, the recommendations include:* 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 additionally requested enhanced clarity regarding the definition of non-performing assets (NPAs) to minimise prolonged disagreements in tax and banking interpretations.The proposal advocates for precise definitions of “parent company” whilst establishing appropriate provisions for non-profit organisations and religious-cum-charitable trusts. The committee suggests that anonymous contributions should not affect their eligibility for tax exemptions.Additionally, it recommended eliminating remaining references to the Income-Tax Act, 1961, to create a comprehensive and dispute-resistant new code.
