The motion to refer the Bill to Select Committee for further examination by Tiruchi Siva (DMK) was defeated. While 74 members opposed the motion, 55 members voted in favour of it.
The Bill, which defines a transgender person as someone whose gender does not match the gender assigned at birth, had been passed by the Lok Sabha in the monsoon session.
Replying to the debate on the Bill, Social Justice and Empowerment Minister Thawar Chand Gehlot said some apprehensions raised by the members were unfounded if the related provisions were studied in detail.
As many as 30 members participated in the discussion. While most members supported the Bill, many wanted it to be referred to a House panel.
The Minister said it was a comprehensive Bill without any lacuna. Some suggestions made in the interest of the transgender community could be considered while finalising the rules to the Bill, he added.
As per 2011 census, there are about 4.8 lakh transgender people, but some estimates peg it at 40 lakh in the country.
A private member Bill had been introduced in the Rajya Sabha by Siva in 2014 to guarantee rights and provide welfare measures for transgender people.
Participating in the debate on Tuesday, Derek O'Brien (TMC) supported the Bill but urged the government to refer it to Select Committee for further examination. He expressed reservations on penal provisions in the Bill pertaining to rape.
In his reply, the Minister said the Bill had provisions against molestation and misbehaviour and not for rape.
Supporting the Bill, YSRCP leader V. Vijayasai Reddy said, "If the House decides to send the Bill to Select Committee he does not have objection but if not then I have some suggestions."
Navneet Krishnan (AIADMK) suggested to change the name of the Bill to the Third Gender Bill.
K. Keshav Rao (TRS) also suggested that the Bill be referred to Select Committee. Besides having reservations over the definition of transgenders, Rao pressed for adequate penal provision for discrimination against members of the transgender community.
Gehlot said the government had drafted the Bill after wider consultations, including Siva's private member Bill. Siva also demanded reservation for transgenders in education and employment.
( With inputs from IANS )