Nirmala Sitharaman to introduce revised Income Tax Bill 2025 in Lok Sabha today. What to expect?
Union Finance Minister Nirmala Sitharaman will introduce the revised the new Income Tax Bill, 2025 as cleared by a Select Committee, in the Lok Sabha today, 11 August.
Sitharaman withdrew the earlier version of the Income Tax Bill, 2025, from the Lok Sabha last week. The Bill, which replaced the Income Tax Act, 1961, was introduced in the Lower House of the Parliament on 13 February earlier this year.
Sitharaman withdrew the Bill just before the House was adjourned on Friday after Krishna Prasad Tenneti, who was in the Chair, asked the Finance Minister to move for leave to do so.
The government, upon withdrawing the Bill, said it would release an updated version that included the changes suggested by the Select Committee.
Why was the Income Tax bill withdrawn?
The Bill was withdrawn to avoid confusion by multiple versions of the Bill and to provide a clear and updated version with all changes incorporated.
“It is being presumed that there will be an absolutely new bill, ignoring the earlier bill for which a lot of work was done, and all the work done and time spent will go down,” Parliamentary Affairs Minister Kiren Rijiju said on Saturday.
The minister made it clear that the apprehensions were ill-founded, as the new bill to be introduced will incorporate all the changes suggested by the Select Committee and accepted by the government.
The Lok Sabha Select Committee, chaired by BJP member Baijayant Panda, made 285 suggestions to the Income Tax Bill, which the government accepted.
The updated legislation with all the changes will be introduced for the consideration of the House to avoid confusion caused by multiple versions of the Bill.
Rijiju said the need for a new bill arose because it would have been tedious to introduce each of the amendments and seek approval of the House separately.
What are the changes in the revised Income Tax Bill?
The revised bill incorporates most of the recommendations of the select committee, which examined the Income Tax Bill 2025 and submitted its report on July 21.
Those changes relate to simplifying the draft legislation’s language.Other suggestions were also received and are required to be incorporated. The changes essentially relate to drafting, phrase alignment, consequential changes, and cross-referencing.
Top changes as proposed by the panel are:
1.Tax refunds: The provision that denies income tax refunds if returns are filed after the due date has been removed. The earlier version of the bill required that a person seeking refunds file an ITR within the due date. Section 433 of the new IT bill states that a refund is sought only while filing a return.
The apprehensions were ill-founded, as the new bill will incorporate all the changes suggested by the Select Committee.
2. Inter-corporate dividends: Another change is the section 80M deduction (under clause 148 of the new bill) for inter-corporate dividends for companies that avail the benefit of the special rate under section 115BAA, which was missed out in the draft of the Bill, which is now withdrawn.
3.Nil TDS: Another committee’s suggestion was to allow taxpayers to avail NIL TDS certificate.
