On Monday, Union Finance Minister Nirmala Sitharaman presented a revised version of the Income Tax Bill, 2025 in the Lok Sabha, which includes the majority of the recommendations put forth by the Parliamentary Select Committee led by BJP leader Baijayant Panda. This introduction occurred amidst significant uproar from the Opposition. While tabling the bill, Sitharaman emphasized that the modifications were essential to accurately convey the intended legislative meaning. She stated, “There are corrections in the nature of drafting, alignment of phrases, consequential changes and cross-referencing,” further explaining that the previous bill was withdrawn to prevent any confusion. The Finance Minister indicated that the updated bill aims to enhance fairness and clarity while ensuring alignment with existing legal provisions. Lawmakers will now have access to a single, updated version that incorporates all proposed changes.
The revised draft includes 285 recommendations from the Parliamentary Select Committee. Its objective is to simplify tax processes, rectify previous shortcomings, and potentially transform the country’s income tax framework. Last week, the government officially withdrew the Income Tax Bill, 2025, which was first introduced in the Lok Sabha on February 13 to replace the current Income Tax Act, 1961. According to the new legislation is intended to simplify India’s long-standing tax structure, diminish legal confusion, and assist individual taxpayers and MSMEs in avoiding unnecessary litigation. The existing Income Tax Act, enacted in 1961, has experienced over 4,000 amendments and now comprises more than five lakh words, rendering it exceedingly complex. Panda remarked that the new bill simplifies the law by nearly 50 percent, making it significantly easier for ordinary taxpayers to comprehend. The committee had identified numerous drafting errors and proposed amendments to mitigate ambiguity. In the revised bill, tax slabs and rates have been modified across the board to benefit all taxpayers. The government has stated that the new structure will considerably lower taxes for the middle class, leaving more disposable income in their hands and boosting consumption, savings, and investment.
