Revised Income Tax Bill, 2025 to include 285 committee recommendations.
Key changes restrict anonymous donations to purely religious trusts only.
Bill enables post-deadline TDS refunds and promotes faceless tax processes.
Simplified legal language aims for clarity and long-term legislative stability.
The revised version of the New Income Tax Bill, 2025 is set to be introduced by Union Minister Nirmala Sitharaman on Monday. This comes just days after the new Income Tax Bill was formally withdrawn, the one that was originally introduced in the Lok Sabha on February 13, 2025.
The new version of the Income Tax Bill will be introduced after incorporating most of the recommendations made by the Select Committee chaired by Baijayant Panda.
Earlier, the decision of withdrawing the new IT Bill had drawn some criticism, mainly due to concerns that the considerable time and effort invested on that may go to waste. However, the Centre defended the move as a necessary step for legislative efficiency.
Why Was the Bill Taken Back?
According to the Union Finance Minister Nirmala Sitharaman, the withdrawal was necessary because of the need to incorporate several technical corrections, including drafting refinements, alignment of phrases as well as proper cross-referencing. All these changes are essential to ensuring legislative clarity and coherence.
The government has also cited the extensive number of suggestions that were made by the Select Committee of Parliament, chaired by Baijayant Panda, as a key reason for taking this way.
Centre’s Response to Criticism
In response to the criticism faced over the bill withdrawal, Union Minister of Parliamentary Affairs Kiren Rijiju clarified the motive behind the move. He said, “On criticisms of withdrawing the new bill and ignoring the earlier one, for which a lot of work was done — and all the work and time spent will go down — that is not the case.”
The Minister explained that when a parliamentary committee submits a report with several proposed amendments, and many of them are accepted by the government, the standard practice is to withdraw the original bill and then introduce a revised version. “This makes it easier for Parliament to consider and pass the Bill in its updated form,” he added.
Further explaining the procedural complexity, Rijiju said, “To incorporate each amendment, three separate motions have to be moved. While this is manageable for a small number of changes, it’s impractical when over 285 changes, including 32 major ones, are recommended. Hence, withdrawing and reintroducing the Bill saves time and ensures procedural efficiency.”
What’s in the New Bill?
In the updated and revised version of the bill, majority of the 285 recommendations made by the Select Committee are expected to be included. These recommendations include significant proposals associated with Anonymous donations exclusively to purely religious trusts; additionally those running social services such as schools or hospitals will no longer qualify.
Aiming to ease compliance, the government may allow taxpayers to claim TDS refunds even after the ITR filing deadline, without facing penalties.
In addition to that, the Bill also proposes safeguards for fairer assessments, requiring tax officials to issue notices and consider taxpayer responses before initiating any action. Putting an emphasis on a digital-first approach, the new framework will promote automation and faceless processes to enhance convenience and reduce the scope for corruption.
The Bill also aims to simplify legal language, replacing the complex terminology of the 1961 Act with clearer, more accessible wording for better public understanding.
This legislative change represents one of the most ambitious tax reforms in recent decades. While the withdrawal of the earlier Bill may seem like a step back, it is actually part of a deliberate process to ensure that the final legislation reflects broad consensus, combining critical feedback and structuring long-term stability.
