The main relief of taxpayers on the card? Central Income Tax Act, revised in LS on August 11 – Comply with Major Recommendations
The revised Income Tax Act 2025: The central government will introduce the revised Income Tax Bill in Lok Sabha on August 11, combining several key changes recommended by the parliamentary panel to simplify decades-old tax laws and loose compliance for individuals and businesses.
Finance Minister Nirmala Sitharaman formally withdrew the bill from February on Friday, which was first introduced at a budget meeting after BJP leader Baijayant Panda proposed 566 amendments in its 4,584-page report.
The move was out of opposition in the room.
The new draft is based primarily on the recommendations of the Commission, aiming to reduce the size and complexity of the 1961 bill by nearly 50%, in simpler language, tighten the ancient legal provisions that define and disambiguate.
Please read also: Income Tax Act 2025: Finance Minister withdraws Income Tax Act in Lok Sabha; new version will be filed on August 11
Income Tax Act 2025 | Here are the key changes to suggest:
Relief of tax refunds: If a return is filed after the expiration date, the tax rebate is removed. Even for delayed filing, taxpayers will be allowed to claim a refund without a penalty.
Anonymous donation: Pure religious trusts will be tax-free from anonymous donations, but trusts operating social services such as hospitals or schools and religious activities will not receive such relief.
Obtain a zero TDS certificate: Measures can be implemented so that taxpayers can more easily obtain a zero TDS certificate.
Evaluation of transparency: The Assessment Officials Act only after notice and taxpayer response is issued to curb arbitrary assessments.
Digital-first tax process: To ease and curb corruption, more automation and faceless litigation should be prepared.
The bill also raises the income rebate threshold under Article 87A of the bill, from the tax rate under the new tax regime to Rs 1.2 lakh, and the maximum rebate amount increases from Rs 25,000 to Rs 60,000. Marginal relief will apply to incomes of just over Rs 1.2 lakh.
Panda said the revised law would “significantly benefit small business owners and MSMEs, who often lack legal and financial expertise to drive complex tax structures.” He added that the reform would create a more equitable system without increasing the additional tax burden for the work and the middle class.
The July 2024 budget announced a comprehensive reform of the Income Tax Act of 1961, which has been amended more than 4,000 times and is now operating to more than 500,000 words. The government said the new legislation would use a simple structured framework, namely Chapter 23, 536 sections and 16 timetables, making applying for taxes “easier for ordinary citizens”.
If passed, the new income tax bill is expected to promote household consumption, savings and investment by leaving more disposable income to taxpayers.
