Income Tax Bill, 2025 which was brought into the Lok Sabha on February 13 to replace the current Income Tax Act, 1961, has been withdrawn officially.
The Government will on Monday seek to adopt a fresh version of Income Tax Bill which includes the majority of suggestions of the Select Committee chaired by BJP MP Baijayant Jay Panda.
So that there are no misrepresentations on various versions of the Bill, and also to have a fresh and updated version of the Bill where all changes have been included, the new version of the Income Tax Bill is introduced which is to be considered by the House.
As Mr Panda, who headed the Parliamentary Select Committee which had the task of revising the legislation, view it, the new legislation, once enacted, will not only simplify the decades-old tax format of India but will also reduce the shrinking law of the land, besides enabling individual taxpayers and MSMEs to shred away unwanted cases of hassle.
More than 4,000 amendments have been made on the current Income Tax Act of 1961, and the act has in excess of 5 lakh words. It has turned out to be too complicated. According to him, the new bill cuts through that significantly by almost 50 per cent-making it much easier on the eye of ordinary tax payers to read and understand,” Mr Panda told news agency IANS.
He also said that small business owners and the MSMEs would be the major beneficiaries of this simplification since they tend not to have the law and financial knowledge to negotiate their way through complex tax systems.
The new measures will also be instrumental in establishing a free and fair system of direct taxation where no extra burden of direct taxes is created on the working and middle-class population of the country.
The change in slabs and rates have been adjusted in an all-inclusive manner to favor every tax payer. According to the government, the new structure considerably lowers the taxes of the middle-income group and leaves them with more income, which enhances household consumption, savings, and investment.
The Finance Act, 2025, has raised the threshold income limit of claiming rebate of tax under section 87A of the Income Tax Act, 1961 by resident individuals taxable under new tax regime under section 115 BAC of the Act to a higher of Rs 12 lakh as compared to the Rs 7 lakh previously and the rebate limit has also been increased to Rs 60,000 compared to the previous limit of Rs 25,000.
The Finance Ministry also offered marginal relief as it is provided earlier under the new tax regime even in cases where the income raised is more but just above 12,00,000 rupees. The proclaimed new income tax bill will simplify tax filing to ordinary people and small entrepreneurs.
Income Tax session in Lok Sabha today
On Friday the Lok Sabha was adjourned till Monday following noisy demonstration by opposition parties which wished to raise legislative issue of revision going on of electoral rolls in Bihar.
Almost at the time when the House was adjourned, Finance Minister Nirmala Sitharaman withdrew the earlier proposed Income-Tax Bill 2025, where the Select Committee had made its report on that bill.
On the House meeting at 3 pm, Tenneti Krishna Prasad, who was in the Chair requested Sitharaman to move that leave may be granted to withdraw the Bill. Then the Bill was passed back.
Parliamentary Affairs Minister Kiren Rijiju added it is unhappy that the opposition parties are squandering time when private member bills were to be considered. According to him, the opposition parties should not claim that they are/ the government was not cooperating since in the first place, the government was ready to talk everything on rules.
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