Finance Minister Nirmala Sitharaman moved to withdraw the New Income Tax Bill, 2025, on Friday, after a Parliamentary Select Committee led by BJP MP Baijayant Panda suggested host of changes to the legislation.
The revised New Income Tax Bill, 2025, will be introduced in the Parliament on August 11, sources said.
The House approved the withdrawal of the Bill amid uproar by Opposition members.
The 31-member Select Committee had made a number of recommendations and suggestions to the original Bill.
Here are the changes suggested to the New Income Tax Bill, 2025, explained in 10 points:
1. The report of the parliamentary panel on the New Income Tax Bill was presented in the Lok Sabha on July 21. In the report, the Select Committee suggested changes including tightening of definitions, removing ambiguities, and aligning the new law with existing frameworks.
2. After comprehensive deliberations, the Committee submitted 285 recommendations focused on simplifying the tax regime and making the Income Tax legislation simplified and lucid.
3. The Committee in its report identified several drafting corrections based on stakeholder suggestions, which they believe are essential for clarity and unambiguous interpretation of the new bill.
4. In total, the parliamentary panel has made a total of 566 suggestions/recommendations in its 4,584-page report.
5. One of the changes suggested by the Select Committee relates to income tax refund, which seeks to remove the provision that denies refund if ITR is filed past the due date. The earlier version of the Bill required a person seeking refunds to file ITR within the due date.
6. Another change suggested by the Select Committee is section 80M deduction, (under clause 148 of the new bill) for inter corporate dividends for companies that avail the benefit of special rate under section 115BAA.
7. The Committee also suggested to allow taxpayers to avail NIL TDS certificate in its report on the New Income Tax Bill.
8. The Income Tax Department however had clarified that no rates of taxes have been recommended to change, as opposed to news reports that suggested change in tax rates on LTCG for certain categories of taxpayers.
9. Other recommendations of the committee include aligning the definition of micro and small enterprises with the MSME Act.
10. The report also recommended amendments in the bill for clarity on advance ruling fees, TDS on provident funds, low-tax certificates, and penalty powers.