Nirmala Sitharaman Tables New Income Tax Bill In Parliament
Union Finance Minister Nirmala Sitharaman on Monday tabled the Income-Tax (No. 2) Bill, 2025, along with the Taxation Laws (Amendment) Bill, 2025, in the Lok Sabha.
The legislation replaces the Income Tax Act of 1961 and incorporates about 285 recommendations from the parliamentary committee, which last month submitted an extensive 4,500-page report. The initial draft of the bill had been presented in February during the Budget session.
The government had withdrawn that earlier version from the House last week, assuring lawmakers that a more refined draft—fully reflecting the committee’s inputs—would be tabled.
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Key Changes in the Revised Draft
The updated bill now adopts the bulk of suggestions put forward by the Select Committee, which scrutinised the proposal following its Budget session introduction. The amendments primarily aim to simplify the text, ensure consistent terminology, make consequential corrections, and strengthen cross-references throughout the legislation.
A significant provision addresses anonymous donations to religious and charitable trusts. Under the new draft, exemptions for such contributions will remain only for trusts engaged purely in religious activities. In cases where religious trusts also manage charitable initiatives—such as running schools, colleges, or hospitals—anonymous donations will no longer be exempt and will instead attract tax.
The government in July announced that all tax benefits available under the New Pension Scheme (NPS) shall apply to the Unified Pension Scheme (UPS), which was implemented from April 1, 2025.
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