New Delhi: Finance Minister Nirmala Sitharaman is set to table the revised Income Tax Bill 2025 in the Lok Sabha today (August 11). The revised Bill, which aims to overhaul India’s six-decade-old direct tax law, has been updated to include 285 suggestions made by a 31-member Select Committee led by BJP MP Baijayant Panda.
Here’s everything you need to know about the revised Bill and how it affects you.
Why a ‘revised’ version?
The original Bill was introduced in February to replace the Income Tax Act, 1961. Last week, the government withdrew that version, saying it wanted to avoid confusion caused by having two versions of the same Bill in circulation. Parliamentary Affairs Minister Kiren Rijiju explained that instead of moving hundreds of separate amendments in the House, it was more practical to fold them into one clean, updated draft. “It is not an entirely new Bill,” he said. “It is the same legislation, but with all agreed changes already incorporated.”
What changes have been made?
The Select Committee, chaired by BJP MP Baijayant Panda, examined the draft law and submitted its report on 21 July. The government accepted almost all its recommendations, which are largely technical and aimed at making the law simpler to read and apply.
1. Refunds made easier
In the earlier draft, taxpayers who filed their income tax returns after the due date could not claim a refund. That restriction has been removed. Under Section 433 of the revised Bill, you can claim a refund at the time of filing, even if you miss the deadline.
2. Corporate dividend correction
The revised bill fixes the omission of the corporate dividend claim. In the earlier draft, the provision allowing companies to claim a deduction under Section 80M for inter-corporate dividends was missing for those opting for the special 22% tax rate under Section 115BAA. This has now been fixed.
3. No TDS certificates
Taxpayers will be able to apply for a certificate that allows zero tax deduction at source if they meet certain conditions, which can improve cash flow.
Will your taxes change immediately?
Not yet. The revised Bill still needs to go through the full parliamentary process and passage in both Lok Sabha and Rajya Sabha before it is signed into law by the President and becomes an Act. Once enacted, its provisions will come into effect from a notified date.
The Income Tax Act, 1961, has been amended many times and is seen as complex and outdated. The new Bill aims to modernise its language, remove ambiguities, and simplify compliance for individuals and businesses. For taxpayers, that could mean clearer rules, fewer procedural hurdles, and quicker resolutions in some areas.
The bottomline
The revised Income Tax Bill 2025 is not a fresh start from scratch. It is a refined draft that takes into account expert and parliamentary feedback. If passed, it will replace a law that has governed India’s tax system for over 60 years. For now, taxpayers should watch its progress through Parliament and be ready to adjust once the fine print is finalised.
(With input from agencies)
