In a significant development, the Indian government has formally withdrawn the much-anticipated Income Tax Bill 2025. The move comes amid feedback from stakeholders and political consultations that pointed to the need for broader deliberation on key provisions of the draft.
On Monday, August 11, a revised version of the Income Tax Bill, featuring the majority of suggestions from the Select Committee led by Shri Baijayant Panda, will be presented.
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To prevent confusion from various versions of the Bill and to present a clear, updated version with all modifications included, the revised Income Tax Bill will be presented to the House for consideration on Monday.
In discussions, the finance ministry contended that the wording simply elucidated current authorities, already backed by judicial decisions and departmental memos. The committee approved the provision with minor adjustments, determining it does not create new legal authority but rephrases existing law more clearly.
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Income Tax Bill 2025 was introduced on Feb 13
The original Income Tax Bill, introduced on February 13, 2025, was a landmark legislative proposal aimed at completely overhauling the Income Tax Act of 1961. Framed as a comprehensive reform, the bill sought to modernize India’s direct tax framework by simplifying language, reducing ambiguities, and aligning tax provisions with contemporary economic realities.
It proposed rationalization of exemptions, restructured tax slabs, and a more taxpayer-friendly compliance mechanism leveraging digital tools.
The initiative was part of a broader effort to make the tax system more transparent, equitable, and efficient—marking one of the most ambitious tax reform attempts in recent decades.
