Finance Minister Nirmala Sitharaman on Monday introduced the modified Income Tax bill in the Lok Sabha after including "almost all of the recommendations of the Select Committee." Introducing The Income-Tax (No.2) Bill, 2025, Sitharaman said the bill seeks to consolidate and amend the law relating to income-tax and will replace the Income Tax Act, 1961.
Recommendations Of Select Committee Accepted
"Almost all of the recommendations of the Select Committee have been accepted by the government. In addition, suggestions have been received from stakeholders about changes that would convey the proposed legal meaning more accurately," said the statement of objects and reasons of the bill.
"There are corrections like drafting, alignment of phrases, consequential changes and cross-referencing. Therefore, a decision has been taken by the government to withdraw the Income-tax Bill, 2025, as reported by the Select Committee. Consequently, the Income-tax (No. 2) Bill, 2025, has been prepared to replace the Income-tax Act, 1961," the statement said.
According to PTI, "The Select Committee, chaired by Baijayant Panda, had suggested a host of changes in the Income-tax Bill, 2025, which was introduced in the Lok Sabha on February 13."
Multiple Drafts Confusing
According to government sources, multiple drafts were confusing, and they decided to introduce a single, updated version to tackle this issue. It ensured that all recent changes were incorporated.
In the new bill, the major recommendations which are incorporated are
Tax Refunds
Inter-Corporate Dividends: Restoration of the section 80M deduction for companies availing the special rate under section 115BAA, which had been omitted in the earlier draft.
Nil TDS Certificates: Provision for taxpayers to apply for NIL TDS certificates, offering relief in cases where no tax deduction at source is warranted.
