The government is going to introduce a new revised Income Tax Bill in the Lok Sabha on August 11, which will include many important changes compared to the old bill. The original bill introduced in February this year was sent to the Select Committee of Parliament for review. Now the government will introduce a revised bill keeping in mind the recommendations of that panel.
Finance Minister Nirmala Sitharaman has withdrawn the bill introduced in February during the Budget session of Parliament.
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The new bill is being brought in an updated and clear form incorporating most of the recommendations of the Select Committee, so that there is no confusion in the law, according to a PTI report, citing sources.
Why is a new bill being brought?
The Income Tax Bill, which was introduced in February 2025, had the objective of completely changing the existing Income Tax Act in force since 1961, and making the tax structure simple, transparent and in line with the digital age. But as soon as it was placed in the Lok Sabha, it was immediately sent to the Select Committee for review.
Hundreds of suggestions have been given in the report, some of which the government is going to include in the new bill.
Know what the 5 big changes are?
1. Change in exemption on secret donation
Now anonymous donations received by purely religious trusts will not be taxed. But this exemption will not apply to trusts which are running social services like hospitals or schools along with being religious.
2. Relief on TDS refund
The committee had suggested that taxpayers should be allowed to claim TDS refund even after the deadline of Income Tax Return (ITR) – that too without any penalty. The government can include this recommendation in the amended bill.
3. The right to review will increase
In the new bill, tax officials will be given more clarity in income assessment cases. They will have the right to take action only after giving notice to taxpayers and their response – which will help in preventing arbitrariness.
4. Priority to digital tax process
Through the new bill, the tax process will be made more digital, automatic and faceless. Its purpose is to increase the convenience of taxpayers and reduce the scope of corruption.
5. Change in the language of old law
One of the major recommendations of the committee was to make the language of law easier for the common man. The technical and English legal terminology in the old 1961 Act will now be changed to easy and simple language.
On certain revisions in the bill, Vivek Jalan – Partner Tax Connect Advisory Services LLP, said, “Clause 263(1)(a)(ix) of the Feb ’25 Income Tax Bill 2025 required that a person seeking refunds under Chapter XX must mandatorily file income tax returns within “due date”. Considering this representation and that such a provision would create a hardship for all taxpayers who miss the due dates due to genuine reasons, the Ministry of Finance, while finalising the draft Income Tax Bill, 2025 has appropriately deleted clause 263(1)(ix) so that there is no unnecessary litigation in this matter which would have impacted all taxpayers.”
The New Income Tax Bill which will be re-tabled on Monday, 11th August 2025, would see that Clause (ix) would be removed and the later clauses will move up i.e. Clause (x) should become the new Clause (ix), he added.
What next?
Now all eyes are on August 11 when the government will table the revised Income Tax Bill 2025 in the Lok Sabha. This bill will not only replace the old tax law but will also be an important step towards improving the experience of taxpayers.
As the revised bill is tabled, more things will become clear about how this new law will simplify the tax-paying process for common people.