New Income Tax Bill 2025: Union Finance Minister Nirmala Sitharaman will introduce the revised Income Tax Bill in Lok Sabha today. It will replace the original draft offered on 13 February 2025. This bill was brought to remove the old Income Tax Act running since 1961.

The government had said that by withdrawing the bill, some improvement will be made so that the new law is easy for everyone to understand. The new bill includes the suggested changes of the Lok Sabha’s Selection Committee. This new updated bill will be a completely new and final version. With this, now people will not have any confusion between the old and new bills.

The first bill was not ignored: Kiren Rijiju

The Finance Minister had said that some technical corrections have been done in the new bill. Drafting has been improved, easy words have been selected and include better cross-referenceing. A major reason for this change is the feedback received by the Selection Committee of the Parliament led by BJP MP Baijayant Panda.

Here, on Friday, the statement of Union Parliamentary Minister Kiren Rijiju came to light amid criticisms to withdraw the new Income Tax Bill from the Lok Sabha. There was a lot of concerns over the withdrawal of the bill, especially on social media. Giving clarification on this, the minister said, it is believed that a completely new bill will be brought, ignoring the earlier bill, on which a lot of work was done. That is, all the work done and spent has gone waste.

Hard work did not go in vain: Rijiju

He further said, “This is a common tradition. When the selection committee presents its report, many improvements are made in it and the government accepts them. The first bill is withdrawn and a new bill is introduced with changes so that it is easy for Parliament to consider the bill and it is also easy to pass. He said that the hard work done in the last six months will not go in vain, but the new bill will give a glimpse of everyone’s hard work and suggestion.

Some special recommendations of the selection committee

• After filing late ITR, allowing taxpayers to refund without any penalty.
• Order to consider tax authorities to issue notice and consider the reply before initiating action.
• Trusts working for both religious and charitable purposes should be given a complete tax on secret donations.
• Apart from this, a modern, digital first and faceless assessment system has also been proposed in the new bill to make it easy to comply with tax related rules and curb corruption.

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What is going to change in New Income Tax Bill 2025, Selection Committee gave these 10 suggestions

New Income Tax Bill 2025: The New Income Tax Bill 2025 will be introduced in Parliament on Monday, August 11, on behalf of the central government. On Friday, Finance Minister Nirmala Sitharaman proposed to withdraw the new Income Tax Bill, 2025 amidst the uproar by opposition members. The House approved it to withdraw it. The Parliamentary Committee headed by BJP MP Baijayant Panda suggested several changes in this bill. Let us give you information about these 10 suggestions suggested by the committee:-

1. The parliamentary panel report on the new income tax bill was introduced in the Lok Sabha on 21 July. The 31 -member selection committee suggested further tightening of the definance, removing ambiguities and alliance with the existing framework.
2. After a long discussion, the committee suggested to make tax regime easier and clear the rules related to income tax.
3. The committee also suggested several corrections based on the suggestions of the stakeholders, which will help in bringing more clarity in the new bill and making it understandable.
4. Overall, the parliamentary panel has given a total of 566 suggestions/recommendations in its 4,584 page report.
5. The Selection Committee has suggested the removal of a rule related to the income tax refund, which mentions not to give refunds for late ITR.
6. The committee has also suggested to make changes in section 80M (Claus 148 of the new bill), which is related to deduction on inter-corporate dividend for companies availing special tax rates under Section 115BAA.
7. In its report on the New Income Tax Bill, the committee has also talked about giving permission to the taxpayers to get zero TDS certificate.
8. The committee has not recommended any change regarding tax rate in the report. Whereas in media reports, LTCG tax rate is being mentioned for some taxpayers, which has been rejected by income tax deposit.
9. The committee suggests that the defense of micro and small enterprises should be done according to the MSME Act.
10. The report suggested some changes to bring advanced ruling fees, TDS on Providend Fund, Low-tax Certificate and Clarity on Penalty Powers.

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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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Income tax bill 2025: A report was presented by the Selection Committee of the Lok Sabha on the Income Tax Bill 2025 in the House on Monday. The committee has recommended many major changes in it, which will replace the Income Tax Act, 1961, nearly six decades. The 4,575 -page report suggests individual taxpayers to claim the tax deduction (TDS) refund at the source by filing the income tax return after the due date without any fine. It has also been suggested to keep the anonymous donation given to religious and paramarth trusts tax free.

New income tax bill introduced

The select committee of the Lok Sabha, constituted by BJP MP Baijayant Panda, has also suggested extensive changes in the manner of management of non-profit organizations (NPOs).

The Select Committee says that the ambiguity should be overcome with the NPOs, especially for the organizations with charitable and charitable objectives with anonymity donation. The committee has opposed taxing on the ‘receipts’ of non-profit institutions (NPOs), as it is a violation of the principle of real income taxation under the Income Tax Act.

The Select Committee has recommended the re -implementation of the word ‘income’ in the suggestions, so that it can be ensured that only the net income of the NPO is taxed. Given that there is a ‘significant difference between anonymity donation’ to the registered NPO, the committee suggested that both religious and paramarth trust (trust) should be exempted on such donations.

30 percent tax on secret donation

In the Income Tax Bill, 2025 section 337, it is proposed to impose 30 percent tax on secret donations to all registered NPOs, in which only the NPOs established for religious purposes have been limited. This is completely different from the current section 115 BBC of the Income Tax Act, 1961. The current law has been given a more comprehensive exemption.

According to this, if a trust or institution is made entirely for religious and charitable works, then secret donations are not taxed. Significantly, such organizations usually receive contribution from traditional mediums (such as donation boxes), where it is impossible to identify the donor. “The committee strongly urges a provision to re -implement a provision in accordance with the explanation given in the BBC,” said in the report of the Parliamentary Committee.

The 31 -member Committee of the Lok Sabha, which investigated the new Income Tax Bill, 2025, also suggested that taxpayers should be allowed to claim TDS refund even after paying any punitive fee even after the last date of filing ITR. Regarding the withdrawal of TDS refund claims of persons who do not usually need to file tax returns, the committee suggested that the Income Tax Bill should remove the provision in the Income Tax Bill, which makes it mandatory for the taxpay to file income tax returns within the fixed date.

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