On Monday, 11 August, the Central Government will present the New Income Tax Bill 2025 in Parliament. Last Friday, amid protests from opposition members, Finance Minister Nirmala Sitharaman proposed withdrawing the earlier version of the Income Tax Bill 2025, and the House approved the withdrawal. The Parliamentary Standing Committee, chaired by BJP MP Baijayant Panda, has suggested several changes to the new bill. Here are the 10 key recommendations made by the committee:
The parliamentary panel’s report on the new income tax bill was tabled in the Lok Sabha on 21 July. The 31-member Selection Committee recommended tightening definitions, removing ambiguities, and aligning the new law with the existing framework.
After extensive discussions, the committee suggested simplifying the tax regime and making income tax rules clearer.
Based on stakeholder feedback, the committee also proposed several corrections to make the new bill easier to understand and more transparent.
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In total, the panel made 566 recommendations in its 4,584-page report.
One of the suggestions was to remove the rule related to income tax refunds that states no refund will be given if the ITR is filed late.
The committee also recommended changes to Section 80M (Clause 148 of the new bill), which deals with deductions on inter-corporate dividends for companies availing special tax rates under Section 115BAA.
It also proposed allowing taxpayers to obtain a zero-TDS certificate.
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The report did not recommend any changes in the tax rates. While some media reports claimed suggestions were made to change the LTCG tax rate for certain taxpayers, the Income Tax Department denied this.
Another recommendation was to align the definition of Micro and Small Enterprises with that under the MSME Act.
The panel also suggested amendments for greater clarity on advance ruling fees, TDS on provident funds, low-tax certificates, and penalty powers.