Income Tax Bill: Income Tax Bill 2025 has been introduced in the Lok Sabha, which is being tried to be made simple and transparent. Baijayant Panda presented it in the House. The committee has suggested many important changes for small taxpayers.
New Income Tax Bill: Income Tax Bill 2025 has been introduced in the Lok Sabha, which is being tried to make more transparent, simple and easy for taxpayers. This bill was placed in the House on Monday by the Chairman of the Select Committee of Lok Sabha and BJP MP Baijayant Panda. The committee has recommended many important changes, especially for those who do not come under the tax net.
The most important thing is that it has been suggested in the bill that people whose income does not come under the tax net should be exempted from the requirement of filing ITR (Income Tax Return) within the stipulated time limit to get TDS (Tax Deducted at Source) refund. That is, if your income is not so much that you are taxed, then there is no need to file ITR early just for the refund.
Also, the committee believes that it is not right to impose a penalty on such people for filing ITR late. This recommendation can be a big relief for the common people, especially for those taxpayers who are worried about their TDS refund despite low income.
What changes did the committee suggest?
The biggest suggestion is that people whose income does not fall under the tax net and from whom TDS has been deducted should be exempted from the requirement of filing ITR on time to get refund. The committee says that if such small taxpayers are charged a penalty for not filing returns on time, it would be unjust because no tax is due on their income.
Apart from this, the committee has advised not to tax anonymous donations received by religious and charitable trusts. According to the current rules, 30 percent tax has to be paid on such donations, but the committee has said that many trusts do both religious and social work and it is not always possible to know the name of the donor. Also, the committee has also said that it is not right to tax the total receipts of non-profit organizations, rather tax should be imposed only on their net income. The purpose of these changes is to make the tax system more practical and simple.
What difference will it make if this bill is implemented?
In February this year, Finance Minister Nirmala Sitharaman introduced the Income Tax Bill 2025 in Parliament to amend the Income Tax Act 1961, which was sent to the 31-member Select Committee for review. In this bill, many old and irrelevant tax rules have been removed and the number of chapters has also been reduced.
The main objective is to make the Income Tax Act so simple that even the common man can understand it without the help of any expert. For this reason, the language of the bill has been simplified and similar rules have been incorporated in one place. The committee has recommended increasing transparency related to tax on anonymous donations received by non-profit organizations and simplifying the process.
In the more than 4,000-page report of the Select Committee, it has been recommended to clarify the calculation of income from houses, the definition of capital assets and infrastructure capital companies. Also, to simplify tax exemptions, it has been advised to add a new definition of micro and small enterprises. However, the committee has approved the provision under which during tax investigation, the officers will have the right to seize the taxpayer’s laptop, email and other digital documents. Now on the basis of this report, there will be a discussion in Parliament and the new law is planned to be implemented from April 1, 2026.
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