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Key Points

Finance Minister Nirmala Sitharaman has introduced a new Income Tax Bill in Lok Sabha after extensive parliamentary review. The legislation, developed by a 31-member committee led by Baijayant Panda, proposes significant amendments to modernize India's tax framework. The bill includes 566 recommendations aimed at reducing legal ambiguities and providing relief to taxpayers. These comprehensive changes reflect the government's commitment to creating a more transparent and efficient taxation system.

Key Points: Nirmala Sitharaman's New Income Tax Bill Unveiled in Lok Sabha

  • New Income Tax Bill aims to consolidate and streamline taxation framework
  • Parliamentary committee suggests 566 amendments to improve clarity
  • Proposed changes include relief for late tax return filers
  • Recommendations align with MSME and non-profit sector needs
2 min read

New Income Tax Bill introduced in Lok Sabha with amendments

Finance Minister introduces comprehensive Income Tax Bill with 566 committee recommendations to simplify tax laws and provide taxpayer relief

"The purpose was to make the Act concise and lucid, thereby reducing disputes and litigation - Finance Ministry Statement"

New Delhi, August 11

Finance Minister Nirmala Sitharaman on Monday introduced a new Income Tax Bill in Lok Sabha to consolidate and amend the law relating to income tax, three days after the previous Bill was withdrawn.

The legislation is named The Income-Tax (No.2) Bill, 2025.

The BJP MP Baijayant Panda-headed 31-member Select Committee had suggested a few changes to the legislation. The House had approved the withdrawal of the Bill amid uproar by Opposition members.

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 Committee, in its 4,584-page report, had 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 had made a total of 566 suggestions/recommendations in its report.

To give significant relief to taxpayers, the committee had suggested changing the provision which disallows refunds if income tax returns are filed beyond the due date.

Other recommendations of the committee included 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, thereby reducing disputes and litigation. The new Income Tax Bill was tabled in Lok Sabha by Union Finance Minister Nirmala Sitharaman on February 13, 2025, and was withdrawn last week.

- ANI

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Reader Comments

P
Priyanka N
As a CA, I appreciate the effort to reduce ambiguities. But 566 recommendations? The implementation will be challenging. Hope they focus on practical aspects first.
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Aman W
Why withdraw and reintroduce? Feels like political games. Just pass good reforms without drama. Taxpayers need stability, not flip-flops!
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Shreya B
The MSME alignment is a welcome move! Small businesses are the backbone of our economy. Hope this reduces compliance burden for entrepreneurs like me 💪
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David E
Working with NGOs in India, I'm glad they're clarifying income vs receipts. The current confusion creates unnecessary audit headaches. Good step forward!
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Nikhil C
4584 pages of report?! Who has time to read this? Government should make executive summaries for common people to understand key changes.
K
Kavya N
Hope they don't make it too complex. Current tax system is already confusing enough for salaried employees. Simplicity should be the goal!

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