Sipu Jha
NEW DELHI: Parliament on Tuesday passed the New Income Tax Bill, 2025, with the Rajya Sabha clearing it by a voice vote and returning it to the Lok Sabha. The legislation, which replaces the six-decade-old Income Tax Act, 1961, aims to simplify tax procedures, cut compliance burdens, and modernise outdated provisions.Finance minister Nirmala Sitharaman said the bill’s language has been made simpler without introducing any new tax rates. She further explained that some parts of the Income Tax Act, 1961, have become outdated and a new law was necessary.The bill was passed in the Lok Sabha on Monday. It also incorporates recommendations from the Parliamentary Select Committee. Sitharaman thanked the committee for its scrutiny, noting that over 75,000 person-hours went into drafting the legislation.She also criticised the opposition for skipping debates on key bills like the Income Tax law. “I am shocked that the opposition doesn’t want to participate,” Sitharaman remarked after the opposition parties staged a walkout in both Houses despite earlier agreeing to a 16-hour debate in each.
Key features of the New I-T Bill, 2025:
- The proposed legislation reduces text volume and sections by approximately 50%, presenting provisions in a more straightforward and comprehensible manner.
- It simplifies the taxation timeline by eliminating the complex distinction between assessment year and previous year, introducing a unified “tax year” concept.
- The bill retains existing provisions for carrying forward losses, provides tax relief on anonymous donations to religious trusts, and adjusts MSME classifications to align with the MSME Act, incorporating the panel’s suggested modifications.
- Allows taxpayers to claim refunds even when returns are submitted after deadlines, which should provide significant relief to individuals filing their taxes.
- Retains provisions for carrying forward losses and grants tax relief on anonymous donations to religious trusts.
- Cuts the TDS correction window from six years to two years, aiming to reduce disputes.
- Clarifies deductions applicable to commuted pension and gratuity payments received by family members.
Also read: What is the New Income Tax Bill 2025? Top points taxpayers should know
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