To remove the outdated rules, the government came up with a new Income Tax Bill in February. It was introduced in Parliament on February 13. It was sent to the Select Committee for scrutiny. The committee has given a total of 566 suggestions on it. The committee’s report was presented in the Lok Sabha on Monday.
New Delhi: There is good news for taxpayers. Many major changes are going to be made in the 64-year-old IT law. A parliamentary committee has given some suggestions on the Income Tax Bill, 2025. The committee’s report was presented in the Lok Sabha on Monday. The committee has given a total of 566 suggestions. One of the important suggestions is about giving relief to taxpayers. The committee has said that if a person is unable to file Income Tax Return (ITR) on time, he should not be deprived of refund.
Also, the committee says that the law should not be such that people have to file returns just to avoid penalty. The committee has also suggested that small taxpayers, whose income does not come under the tax purview, but whose tax has been deducted in the form of TDS, should be exempted from the requirement of filing returns to get refund. Such taxpayers should be allowed to claim refund even without filing returns. The committee has also suggested that taxpayers should be allowed to claim TDS refund even after the last date of filing ITR. There should be no penalty on them for this.
Standard Deduction
To provide relief to property owners, the committee has suggested that the standard deduction should be 30%. This deduction should be available after deducting municipal tax on the annual value of the property. Apart from this, deduction on pre-construction interest should be given for let-out properties as well as self-occupied properties, as is given in the existing IT Act. The report has also suggested amendments on advance ruling fees, TDS on provident fund, low-tax certificate and penalty powers.
The committee has also suggested merging the definition of micro, small and medium enterprises (MSME) with the MSME Act. Also, for non-profit organizations, the committee has asked for clarification of terms like ‘income’ vs ‘receipts’, anonymous donations and deemed application concept. The committee wants these terms to be clarified so that legal disputes can be avoided. The committee has said to continue tax exemption on anonymous donations to religious and charitable trusts in the new Income Tax Bill. The committee says that if these exemptions are removed, non-profit groups will be adversely affected.
What will be the benefit
A new Income Tax Bill has been introduced to remove the outdated rules. It was introduced in Parliament on 13 February. Its purpose is to simplify the language and structure of the Income Tax Act 1961. It was sent to the committee for scrutiny. Finance Minister Nirmala Sitharaman had said that this bill is necessary for the 21st century. This will make the tax system better.
