Income tax bill 2025: Amid the demonstration of MPs of India coalition for amending the voter list before the Bihar assembly elections, the new income tax bill brought in place of the six decade -old income tax law was passed in the Lok Sabha on Monday. It was introduced by Nirmala Sitharaman instead of the Old Income Tax Act, 1961.

The government had formally withdrawn the income tax bill introduced in February last week, as some more changes were felt in it. Most of the suggestions of Baijayant Panda -led Pravar Committee have been included in this new income tax bill.

Will something change?

Many such changes have been made in the new bill, which can make the Income Tax Act easier. In Parliament, the Union Finance Minister said that the real purpose of bringing this bill was to avoid confusion and present the updated bill. This new bill has 536 sections, 23 chapters and 16 schedules, which have been easily understood through table-formul.

The new bill has more rights to CBDT (Central Direct Tax Board), so that the tax system can be made more transparent and digital. Also, the rules of TDS and deputy have been easier.

This bill provides for taxpayers to reduce fine. To reduce tax disputes, the policy of “first trust, then investigation” has been adopted. Apart from this, the rules related to refund have also been changed on late filing of income tax returns. Previously, despite the reasons of reasonable reasons, the taxpayers did not get refunds for filing late returns, but now this ban has been lifted.

More rights to CBDT

Taxpayers have been provided with the facility of taking “Nil TDS” certificates without any tax liability, which can improve cash flow. CBDT has been given more rights than before making rules to make the tax process fast and corruption free. Apart from this, an attempt has also been made to promote faceless assessment and automatic case allocation in the bill.

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The central government has withdrawn the income tax bill in the Lok Sabha. The government will now bring a new bill instead. After the table in the Lok Sabha in February 2025, it was sent to the Select Committee. The government will now bring a new bill to accept all the suggestions of the Select Committee.

When will the updated version of the bill be introduced in Parliament?

The central government introduced this new bill in the Lok Sabha on 13 February 2025 and sent it to the Select Committee for investigation on the same day. The committee submitted its report to Parliament on 22 July 2025. The updated version of the new income tax bill has been approved in the central government cabinet. This bill will now be introduced in Lok Sabha on Monday (11 August 2025).

Will there be any change in tax slab too?

This bill will replace the 6 decade -old Income Tax Act 1961. The Select Committee, led by BJP MP Baijayant Panda, has made several amendments after reviewing it. The biggest question about the new income tax bill is about the slab.

The Income Tax Department had made it clear that there is no proposal for any change regarding tax slab in the new bill. According to the Income Tax Department, the aim of the new bill is to simplify the language and remove the unnecessary provisions.

Bill was withdrawn after approval from Parliament

Finance Minister Nirmala Sitharaman sought permission to withdraw the Income Tax Bill, 2025 as per the report of the Selection Committee, amidst the noise of the members of the opposition parties on the issue of special intensive revision (SIR) of the voter list in Bihar. After the approval of the House, he withdrew the Income Tax Bill.

The Select Committee suggested that taxpayers should be allowed to claim TDS refund without any penal charge even after the last date for filing ITR.

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Finance Minister Nirmala Sitharaman discussed India’s economic reforms and future outline with Lok Sabha MPs in New Delhi. This week, he supported a provision in the Income Tax Bill 2025, which provides access to tax evasion to tax evaders and to keep an eye on financial criminals. He cited a recent case in which a syndicate seized more than Rs 90 crore in Crypto Asset from a syndicate by decrying the WhatsApp message.

Sitharaman warned that encrypted communication channels are being misused for financial crime such as money laundering and tax evasion. Speaking in Parliament, he said that business and individuals can maintain clean manual bookkeeping, but use digital platforms to do financial crime.

Supporting the provision in the new income tax bill, he said that “the Income Tax Act of 1961 has said the bookkeeping (Physical Book of Account) and Manual Records, but the digital record has not been talked about. This has created controversy, because individuals can ask the question that despite showing the bookkeeping, why are they needed in their digital records. The new bill has to be removed.

The Finance Minister said that an undeclared fund of Rs 250 crore was detected through encrypted messages and scanning of mobile phones.

He said that “WhatsApp communication has shown that there are syndicates included in fake bills of Rs 200 crore and examples where the sale of land was manipulated in a capital gains on the sale of land, which reduced by Rs 150 crore to Rs 2 crore. Professional group on WhatsApp has also been implicated. Google Maps History has been implicated. It has been installed, while the Instagram account helped ownership of expensive vehicles associated with benami property. “

Sitharaman did not disclose the deadline to detect, identify and seize these funds. There was also a lack of information about the crypto asset seized in the information given by him. It is not clear whether the encryption of WhatsApp was directly bypassed or a chat from the device seized during the investigation.

Whatsapp encryption broken!

Meta-owned WhatsApp has said that its message between end-to-end encryption users is completely private.

“End-to-end encryption keeps your personal messages and calls between you and the person you are talking. No one outside the chat can read or share them or even WhatsApp can read or share them. This is because your messages with end-to-end encryption are safe from your message lock and you only have the necessary special people and you have to unlock and read them.”

Whatsapp’s head Will Cathcart in Meta has cleaned the platform’s stance on breaking encryption earlier.

The fact remains that scanning everyone’s messages would destroy privacy as we know it. That was as true last year as it is today. @WhatsApp Will Never Break Our Encryption and Remains Vigilant Against Threats to Do So. https://t.co/ihsbohkp8r

– Will Cathcart (@WCATHCART) September 6, 2023

Whatsapp rejected the request of Gadgets 360 to comment on the Finance Minister’s comments. The platform has also not commented on India’s new Income Tax Bill 2025, which provides access to the tax authorization until private communication.