Parliament to See Fresh Version of Income Tax Bill Today

After shelving its earlier attempt, the government will present a revised Income Tax Bill, 2025, in Parliament today. The move follows criticism of the initial draft, which was withdrawn last week over concerns about unclear provisions and technical inconsistencies.

Why the First Draft Was Pulled Back

The February version was intended to replace the Income Tax Act, 1961, offering a cleaner, more modern set of rules. But several points drew objections, particularly clauses linked to house property (21, 22), commercial property (20), and salary deductions (19, Schedule VII). Lawmakers and tax specialists argued that these sections were either confusing or too restrictive, prompting the bill’s withdrawal on August 8.

What the New Draft May Include

According to officials, the updated proposal draws heavily on feedback from the Select Committee and a parliamentary panel. Among the expected revisions are:

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A shift to plainer language and a simplified structure to help taxpayers and reduce disputes.
Replacing the existing “previous year” and “assessment year” system with a single “tax year” reference.
Limiting anonymous donations strictly to organisations engaged in religious activities, removing the benefit from trusts that also provide social services.

Allowing TDS refunds after an income tax return is filed, without imposing penalties.
Introducing a safeguard requiring tax authorities to issue formal notices and consider responses before taking any enforcement step.

Statement from the Government

Parliamentary Affairs Minister Kiren Rijiju has said the revised bill keeps the main objectives intact — modernisation and simplification — but incorporates all the recommendations put forward by the Select Committee. The intent, he noted, is to make the tax system both fairer and easier to comply with.

Conclusion

The second attempt at passing the Income Tax Bill, 2025, is expected to draw close attention in Parliament. Supporters hope the redrafted version will resolve earlier issues, smooth out compliance, and give taxpayers a more transparent framework. Whether the changes are enough to win broad approval will become clear as the debate unfolds.