New Delhi [India], August 8 : Finance Minister Nirmala Sitharaman on Friday moved to withdraw the Income-Tax Bill, 2025, after the BJP MP Baijayant Panda-headed 31-member Select Committee had suggested a few changes to the legislation.
The House approved the withdrawal of the Bill amid uproar by Opposition members.
"A new version of the Income Tax Bill, incorporating most of the recommendations made by the Select Committee chaired by Shri Baijayant Panda, will be introduced on Monday, August 11," people in the know said.
"To avoid confusion by multiple versions of the Bill and to provide a clear and updated version with all changes incorporated, the new version of the Income Tax Bill will be introduced for the consideration of the House on Monday," they added.
On July 21, the first day of the current Monsoon session of Parliament, the report of the parliamentary panel on the new Income-Tax Bill was presented in Lok Sabha. In its report, the panel has suggested important changes to tighten definitions, remove ambiguities, and align the new law with existing frameworks.
The panel examined the Income-tax Bill 2025, which seeks to simplify the language and structure of the Income Tax Act 1961 and submitted its report.
The Committee, in its 4,584-page report, identified several drafting corrections based on stakeholder suggestions, which they believe are essential for clarity and unambiguous interpretation of the new bill. The parliamentary panel has made a total of 566 suggestions/recommendations in its report.
To give significant relief to taxpayers, the committee has suggested changing the provision which disallows refunds if income tax returns are filed beyond the due date.
Other recommendations of the committee include aligning the definition of micro and small enterprises with the MSME Act.
For non-profit organisations, the committee asked for clarification over the terms 'income' vs 'receipts', anonymous donations, and the removal of the deemed application concept. The panel asked for these to be fixed to avoid legal disputes.
The report also recommended amendments in the bill for clarity on advance ruling fees, TDS on provident funds, low-tax certificates, and penalty powers.
In the July 2024 Budget, the government proposed a comprehensive review of the Income-tax Act of 1961. The purpose was to make the Act concise and lucid and reduce disputes and litigation.
The new Income Tax Bill was tabled in Lok Sabha by Union Finance Minister Nirmala Sitharaman on February 13, 2025.
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