Income Tax Bill 2025 withdrawn: The government has withdrawn the old Income Tax Bill 2025. A new bill will be introduced on August 11 with some new suggestions.
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Income Tax Bill 2025: The government on Friday withdrew the Income Tax Bill 2025. The bill was introduced in the Lok Sabha on February 13. Its purpose was to replace the Income Tax Act, 1961. Now a new bill will come. It will include the suggestions of the parliamentary committee headed by BJP MP Baijayant Panda. A total of 285 suggestions were given. The new bill will be introduced on August 11.
The aim of the Income Tax Bill 2025 was to simplify India’s tax system. It was going to replace the six-decade-old law. It talked about changes in tax slabs, rules for digital tax, ways to resolve disputes and use of data and technology to increase the number of tax payers. But, the parliamentary committee gave some suggestions on this bill. Therefore, some changes will be made in it. Officials say that the purpose of withdrawing the bill is that people should not have any confusion with different versions. Now a bill will be introduced which will include all the changes.
What suggestions did the committee give?
A 31-member parliamentary committee has submitted a report. This report is 4575 pages long. It has suggestions to correct some minor mistakes and make 32 major changes. Some of the important changes that have been suggested are as follows:
The committee has asked for changes in the definition of beneficial owner. This means that those who make direct or indirect gains from shares in the tax year can carry forward the losses.
The committee has also said that companies should get tax exemption on dividends received among themselves. This exemption was not there in the earlier bill. A standard 30% exemption is also proposed. This exemption will be available after deducting municipal tax. Apart from this, exemption can also be given on interest before the property is built, if the property is given on rent.
New rules for individual taxpayers too
The committee has given some suggestions to simplify the rules for individual taxpayers. These suggestions are as follows:
- ‘Nil’ tax deduction certificates should be issued.
- There should be a right to waive penalty if the mistake is not made intentionally.
- Small taxpayers should be able to get refund on filing ITR late.
- The committee has also asked to clarify the definition of non-performing assets (NPAs). This will reduce disputes related to tax and banking.
Clarity for companies and charitable trusts
The report proposes to clarify the definition of ‘parent company’. Also, it has been asked to make correct rules for non-profit and religious-cum-charitable trusts. The committee says that anonymous donations should not deprive them of tax exemption. The committee has also asked to remove the remaining references to the Income Tax Act, 1961. This will ensure that the new code is complete in itself and there is no litigation on it. This means that the new law should be such that there is no need to look at the old law to understand it. Everything should be written in the new law itself.
