Sign in Subscribe
Legislative bills

New Income Tax Bill 2025 Passes in Parliament Amid Controversy

Strategic Insights

— 1 min read

The New Income Tax Bill 2025, aimed at simplifying tax procedures and modernising outdated provisions, has been passed in the Lok Sabha and Rajya Sabha. The bill, which replaces the 1961 Income Tax Act, was met with controversy as opposition parties staged a walkout, criticising the government for not allowing sufficient debate. Finance Minister Nirmala Sitharaman praised the Parliamentary Select Committee for its scrutiny, noting that over 75,000 person-hours went into drafting the legislation.

Key Takeaways:

  • The New Income Tax Bill 2025 reduces the text volume and sections by approximately 50%, presenting provisions in a more straightforward and comprehensible manner.
  • The bill simplifies the taxation timeline by eliminating the complex distinction between assessment year and previous year, introducing a unified "tax year" concept.
  • Taxpayers will be allowed to claim refunds even when returns are submitted after deadlines, providing significant relief to individuals filing their taxes.
  • Provisions for carrying forward losses and granting tax relief on anonymous donations to religious trusts are retained in the new bill.
  • The TDS correction window is reduced from six years to two years, aiming to reduce disputes.
  • Deductions applicable to commuted pension and gratuity payments received by family members are clarified in the new bill.
  • MSME classifications are adjusted to align with the MSME Act, incorporating the panel's suggested modifications.

Statistics:

  • The New Income Tax Bill 2025 reduces text volume and sections by approximately 50%.
  • Over 75,000 person-hours went into drafting the legislation.
  • The TDS correction window is reduced from six years to two years.
  • Taxpayers will be allowed to claim refunds even when returns are submitted after deadlines.

Sources:

  • TOI Business Desk article, "Parliament Passes New Income Tax Bill, 75,000 Hours Went Into Drafting"
  • Unknown source: "Changes in the New Income Tax Bill 2025" (Note: The article does not provide the source, but it is mentioned in the "Also read" section)

Read more