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Legislative bills

Lok Sabha Approves Revised Income Tax Bill 2025 to Simplify Tax Laws

Strategic Insights

— 1 min read

The Lok Sabha on Monday passed the revised Income Tax Bill 2025, a major reform aimed at modernizing and simplifying India's decades-old income tax law. The bill, introduced by Finance Minister Nirmala Sitharaman, incorporates recommendations from the Select Committee of Parliament and aims to ease compliance for taxpayers, individuals, companies, and Micro, Small, and Medium Enterprises (MSMEs).

Key Takeaways:

  • The revised I-T bill accepts almost all of the 285 recommendations made by the Select Committee, which aimed to simplify and modernize the country's tax laws.
  • The time period for filing TDS correction statements has been reduced to two years from six years, expected to significantly reduce grievances of deductees.
  • Flexibility has been provided in the new I-T bill for allowing refund claims in cases where the return is not filed on time, providing a major relief for taxpayers.
  • The revised bill addresses concerns about ambiguities in the original draft, particularly regarding house property taxation, pension deductions, and the refund process for delayed filings.
  • The new I-T Bill aims to eliminate redundant and repetitive provisions for better navigation, reorganizing sections logically to facilitate ease of reference and promote clarity.
  • Mandatory investment and deposit of deemed accumulated income of 15% of regular income in specified modes has been done away with.
  • The word "profession" has been added after "business" in clause 187 to enable professionals with total receipts exceeding Rs 50 crore in a year to make prescribed electronic modes of payment.

Statistics:

  • 285 recommendations made by the Select Committee of Parliament to the I-T Bill 2025.
  • Time period for filing TDS correction statements reduced to two years from six years.
  • Taxpayers expected to benefit from the flexibility in refund claims, particularly those who return on time.
  • The ₹50 crore threshold for professionals to use prescribed electronic payment modes.
  • From 6 years to 2 years, the time frame for filing TDS correction statements has been reduced.

Sources:

  • Lok Sabha TV
  • Times of India
  • Parliament of India Website
  • Business Standard
  • Economic Times

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