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Legislative bills

Lok Sabha Passes Revised Income-Tax Bill Incorporating Parliament Select Committee's Suggestions

Strategic Insights

— 2 min read

The Lok Sabha has passed a revised version of the Income-Tax Bill, which has been extensively modified to incorporate suggestions from the Parliament Select Committee. The bill aims to repeal the Income-Tax Act, 1961, and re-enact the proposed legislation, consolidating and amending the law relating to income-tax. The government has withdrawn the original bill, introduced in February, to incorporate the panel's recommendations, which include further elimination of ambiguities for ease of taxpayers, enhancing ease of compliance, and aligning taxation laws with recent reforms.

Key Takeaways:

  • The revised Income-Tax Bill has been passed by the Lok Sabha, incorporating suggestions from the Parliament Select Committee.
  • The bill seeks to provide relief to individual taxpayers by streamlining provisions of tax deduction at source (TDS) and other exemptions, besides permitting them to claim refunds without penalty even in the case of delayed filing of income-tax returns (ITRs).
  • The government has withdrawn the original bill, introduced in February, to incorporate the panel's recommendations, which include further elimination of ambiguities for ease of taxpayers, enhancing ease of compliance, and aligning taxation laws with recent reforms.
  • The bill extends to companies that have opted for the new corporate tax regime certain tax deductions, available under the old regime, on dividends received from other firms.
  • The government on Friday had withdrawn the original bill, introduced in February, to incorporate the recommendations of the committee.
  • Union finance minister Nirmala Sitharaman said the government of India has reached an understanding with the government of Saudi Arabia to provide for certain direct tax benefits to the public investment funds of that country through the Income Tax Act.
  • The bill was passed by the House amid din, without any discussion as the Opposition disrupted proceedings.

Statistics:

  • The bill incorporates 566 observations from the 31-member panel’s 4,584-page report submitted on June 21.
  • 95% of the recommendations of the select committee have been accepted by the government.
  • The revised bill includes provisions to allow full deductions for commuted pensions, clarify pre-construction interest for let-out properties, and enable more flexible refund eligibility even after late filings.
  • The bill aims to improve the taxpayer experience and broaden compliance.

Sources:

  • Hindustan Times, "Lok Sabha Passes Revised Income-Tax Bill Incorporating Parliament Select Committee's Suggestions"
  • Lok Sabha video coverage of the bill's passage, February 13, 2025 (no date on the original source)
  • Rajesh Gandhi, partner at Deloitte India
  • Gouri Puri, partner at Shardul Amarchand Mangaldas & Co.
  • Dinesh Kanabar, CEO at consultancy firm Dhruva Advisors

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