The Monsoon Session of the Indian Parliament is set to begin in two days, running from 21 July to 12 August. Several important bills are expected to be introduced during this session, but all eyes are on the New Income Tax Bill 2025. A special committee of the Lok Sabha has reviewed the bill and provided 285 suggestions, according to media reports. The committee will present its report in the Lok Sabha on 21 July. Here are some of the major recommendations proposed:
What Has the Committee Suggested?
- Refund Rules for Late ITR Filing:
The committee has suggested amending the rule that disallows refunds if the income tax return (ITR) is filed after the due date. Currently, Section 433 of the new Income Tax Bill states that refunds can only be claimed if the return is filed within the deadline. The committee has recommended relaxing this clause. - Section 80M Deduction Reinstatement:
The deduction under Section 80M was missing from the draft bill. This section is important for companies that benefit from special tax rates under Section 115BAA and distribute inter-corporate dividends. The committee has proposed reinstating this deduction to promote a streamlined corporate tax structure and reduce the tax burden on companies. - Zero TDS Certificate:
Under the current provisions, taxpayers can only get a certificate for lower TDS (Tax Deducted at Source). The committee has recommended that Zero TDS certificates should also be allowed.
The existing Income Tax Act, 1961, was enforced on 1 April 1962 and has been amended 65 times with over 4,000 changes so far.
Also Read: Excel Utility for ITR-2 and ITR-3 Released, Making ITR Filing Easier for Taxpayers
What Will the New Income Tax Act Include?
The primary goal of the new Income Tax Act is to simplify and clarify the tax system. It aims to use plain language, shorter sentences, and active voice, removing complicated jargon and repetitive provisions. The new bill contains 2.6 lakh words and 536 sections, with the number of chapters reduced to 23. It also avoids cross-referencing, so readers won’t have to flip between multiple sections to understand a single provision. This will help resolve many legal issues arising from court interpretations.
Who Will Be Affected by These Changes?
- Taxpayers will benefit the most, especially those who miss the ITR filing deadline due to unavoidable reasons, as the refund rule may become more flexible.
- Companies will also gain, especially from the reintroduction of Section 80M, which will ease capital operations in the corporate sector.
- By cleaning up outdated provisions and reducing complexity, the law aims to increase transparency and consistency in the tax system.