Parliament on Tuesday passed a new Income Tax bill with the Rajya Sabha, in which it was approved by a voice vote.
Union Finance Minister Nirmala Sitarman transferred the Income Tax (No. 2) Bill, 2025 and Taxation Act (Amendment) Bill, 2025 for consideration and return.
The Lok Sabha on Monday passed a new income tax bill without debate, as a few hours after Finance Minister Nirmala Sitarman was introduced in the House.
Income Tax (No.2) Bill, 2025, which was introduced on Monday afternoon, when the government withdrew the final income tax bill on Friday in the Lok Sabha, incorporating almost all the recommendations of the selection committee, which investigated the law.
The new Income Tax bill provides flexibility to allow corresponding claims in cases where returns are not filed in the appointed time and reduces the duration of time to file TDS reform statements, which may be from six years to two years from six years to two years provided in the Income Tax Act, 1961.
The government said in the budget in July 2024 that the Income Tax Act, 1961’s extensive review act would be done to make, clear and easier to read and understand.
A new income tax bill was passed without a debate on their demand for debate on the special intensive amendment (SIR) of electoral rolls in Bihar. Both Lok Sabha and Rajya Sabha have seen continuous disruption since the onset of the monsoon session of Parliament on the demand of the opposition.
The government started the Income Tax Bill, 2025 in the Lok Sabha on 13 February 2025, and was sent to the selection committee for the examination.
The Select Committee presented its report in the Lok Sabha on July 21, 2025. The new and revised bill also incorporates suggestions about changes from stakeholders that will express the proposed legal meaning more accurately.
There were improvements in the nature of draft, alignment of phrases, resulting changes and cross-referenceing and the government decided to withdraw the Income Tax Bill, withdraw 2025 and bring back the Income Tax (No. 2) Bill, 2025.
The new bill replaces the Income Tax Act, 1961, which has been subjected to several amendments since its passage more than sixty -four years ago.
As a result of these amendments, the basic structure of the Income-tax Act was carried forward and the language has become complicated, “increasing compliance for taxpayers and hindering the efficiency of tax administration”.
The bills and reasons for the bill states that taxpayers, physicians and tax administrators also expressed concern about the complex provisions and structure of the Income Tax Act 1961.
A new income tax bill was passed without a debate on their demand for debate on the special intensive amendment (SIR) of electoral rolls in Bihar. Both Lok Sabha and Rajya Sabha have seen continuous disruption since the onset of the monsoon session of Parliament on opposition demand.
The Lok Sabha also passed the taxation law (amendment) bill, 2025 without debate.
The 31-member selection committee of BJP MP Bajyant Panda suggested some changes in the law.
In its report, the panel has suggested significant changes to tighten the definitions, remove ambiguities and align new law with existing outlines.
The committee, in its 4,584-eye report, identified several drafting reforms based on stakeholder suggestions, which he believed was necessary for the clarity and unclear interpretation of the new bill. The parliamentary panel in its report made a total of 566 suggestions and recommendations.
To give significant relief to the taxpayers, the committee suggested to change the provision that the income tax return is filed beyond the due date.
Other recommendations of the committee included aligning the definition of micro and small enterprises with the MSME Act.
For non-profit organizations, the committee asked for clarification to remove the concept of ‘Income’ vs ‘receipts’, anonymous donations, and deemed application. The panel asked them to decide to avoid legal disputes.
The report recommended amendment of the bill for clarity on advanced ruling fees, TDs on future funds, reduced tax certificates and fine powers.
According to the provisions of the new Income Tax Bill, deduction under 80 meters of IT Act, 1961 (IT bill, section 148 of 2025) is also available for companies who have opted for new governance.
The deduction for family members and deduction for gratuity is provided under Claus 93 of 2025.
The provisions of MAT (minimum alternative tax) and AMT (optional minimum tax) are distinguished as two sub-classes under Section 206.
The provisions of AMT apply only to non-corporates who have claimed cuts. LLPs who have only capital profit income are not responsible for AMT if there is no claim for deduction.
The term “profession” is added after “business”, Claus 187 has the facility of prescribed electronic mode of payment of more than Rs 50 crore a year to enable professionals with total receipts. The flexibility has been provided to allow the corresponding claims in cases where the returns have not been filed with the removal of 263 (1) (IX) in the appointed time and are re -prepared for better presentation of the provisions related to the set and loss sets, but with the same intention.
The concept of receipt has been replaced with the concept of income as the Income Tax Act, 1961. The use of capital gains on the acquisition of the new capital asset will be considered as an application for income by a registered non-profit organization, as in the Inom Tax Act, 1961.
Where the application of regular income decreases by 85% of regular income depending on such income, which is not obtained or obtained during the tax year, on the option used by the assessee, such income will be considered as an application of income in the year in which such income is received.
Government sources said that provisions related to taxation of anonymous donations have been formed with the current provisions of the Income Tax Act, 1961 and the exemption mixed item has also been made available to the registered non-profit organization.
Mixed object registered non-profiting organization is clearly specified, with compulsory investment and deposit of accumulated income of 15% of regular income in specified mode.
Officials said that for TDS reform statements, the time period of filing statements in the Income Tax Act, 1961 has been reduced by 6 years. This is expected to significantly reduce complaints of cuts.
Amendments for the Finance Act, 2025 which were required to include and now they have been made part of the new bill. Amendments made by the Taxation Law (Amendment) Bill, 2025 have also been made part of the new bill. (AI)