Income Tax Bill 2025 Withdrawn

Source: Indian Express
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Overview

1. News in Brief
2. Reason for Income Tax Bill

Why in the News?

Finance Minister Nirmala Sitharaman recently withdrew the Income Tax Bill, 2025, in the Lok Sabha.

News in Brief

• Government will table an updated version.
• The government decided to do this to incorporate the changes suggested by the Select Committee.
• An updated version of the Income Tax Bill will likely include most of the recommendations suggested by the Select Committee
• The new version will be introduced in the Lok Sabha on Monday, August 11.

Reason for Income Tax Bill

• To avoid confusion caused by multiple versions of the Bill and to provide a clear and updated version with all changes incorporated.
• The new version of the Income Tax Bill will be introduced for the consideration of the House.
• The Income Tax Bill which will replace the six-decade-old Income Tax Act, 1961.
• It was introduced in the Lok Sabha on February 13 and soon referred to the Select Committee for scrutiny.

Suggested Changes

• Select Committee has 31 members and is chaired by BJP leader Baijayant Panda.
• It is understood to have suggested multiple changes to the legislation, including favouring continuing the tax exemption on anonymous donations made to religious-cum-charitable trusts in the new law, besides batting for taxpayers to be allowed to claim TDS refund even after the ITR filing due date without paying any penal charges.
• The government in the new Bill has exempted non-profit organisations (NPOs) from taxing anonymous donations received by purely religious trusts.
• However, such donations received by a religious trust that may also have other charitable functions, like running hospitals and educational institutions, will be taxed as per law, as per the Bill.

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