The Income Tax Bill, 2025, initially introduced in the Lok Sabha on February 13 to replace the existing Income-Tax Act of 1961, has been officially withdrawn. According to sources reported by India Today TV, a revised version of the bill will be tabled in Parliament on August 11.
The decision to withdraw the earlier draft was made to avoid confusion due to multiple versions and to present a comprehensive bill with all recommended changes incorporated. The updated bill includes major recommendations made by the Select Committee chaired by Shri Baijayant Panda, whose report was submitted to Parliament on July 21.
The committee’s detailed report, spanning over 4,500 pages, includes 285 suggestions aimed at improving the proposed legislation. Among the key changes are provisions likely to benefit everyday taxpayers.
Key Proposed Changes:
- Clarity on House Property Income Deductions:
The revised bill may explicitly include the 30% standard deduction after municipal tax deductions for income from house property, to eliminate ambiguity. Additionally, the committee suggests extending home loan interest deductions—currently available only for self-occupied properties—to rented properties as well. - Faster Refunds for TDS and TCS:
Recognizing delays in tax refunds, the committee has proposed a simplified, transparent process to expedite refunds related to Tax Deducted at Source (TDS) and Tax Collected at Source (TCS).
The Central Board of Direct Taxes (CBDT) is also preparing new rules under the “Enforcement with Empathy” framework, which aims to reduce procedural burdens for honest taxpayers.
The revised Income Tax Bill will be taken up for discussion in the Lok Sabha on Monday.