New Income Tax Bill 2025: Panel Report To Be Tabled In Lok Sabha On Monday
The much-anticipated report of the Parliamentary Select Committee examining the new Income Tax Bill, 2025, is set to be presented in the Lok Sabha on Monday, paving the way for further legislative action on a complete overhaul of India’s direct tax framework.
The 31-member committee, chaired by BJP MP Baijayant Panda, was constituted by Lok Sabha Speaker Om Birla to review and suggest changes to the draft Bill.
Finance Minister Nirmala Sitharaman earlier introduced the proposed legislation on February 13, 2025. In its latest meeting held on July 16, the committee adopted the report containing 285 recommendations aimed at refining the proposed tax law, reported PTI.
The new Bill, which intends to replace the Income Tax Act of 1961, significantly trims the legal text and attempts to improve clarity and compliance. According to the FAQs issued by the Income Tax Department, the draft legislation comprises 2.6 lakh words, down from 5.12 lakh in the current law. It also reduces the number of chapters from 47 to 23 and sections from 819 to 536.
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What Does The New Income Tax Bill Say?
One of the key features of the revamped tax legislation is the simplification of tax terminology and processes. The Bill proposes to eliminate the traditional concept of an ‘assessment year’. Instead, income will be taxed in the same ‘tax year’ it is earned, replacing the earlier system where income from one year (e.g., 2023–24) was assessed and taxed in the following year (e.g., 2024–25).
The updated draft also restructures provisions for exemptions and the Tax Deducted at Source (TDS)/Tax Collected at Source (TCS) by presenting them in tabular form for easier interpretation. It eliminates 1,200 provisos and 900 explanatory clauses from the current Act and includes 57 tables—up from just 18 in the existing law. In addition, the section governing not-for-profit organisations has been revised for better comprehension and made more inclusive by using plain language.
When tabling the Bill earlier this year, Finance Minister Sitharaman had underscored the intent to minimise ambiguities and reduce litigation through clearer language and structure. “Substantial changes have been made in the Bill. The number of words have been halved from 5.12 lakh, and sections reduced from 819 to 236,” she had stated during the presentation.
The Monsoon Session of Parliament, where the report will be tabled, begins on July 21 and will continue until August 21, 2025.
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