New Income-Tax Bill 2025: In a significant development for India’s tax system, the Union Government has withdrawn the original version of the Income-Tax Bill, 2025, which was first introduced in the Lok Sabha on February 13, 2025. According to sources close to India Today TV, a revised version of the bill — reflecting major recommendations from the Select Committee led by Shri Baijayant Panda — is now set to be tabled in Parliament on Monday, August 11.
The move aims to streamline the legislative process by avoiding confusion that might arise from having multiple draft versions in circulation. Officials say the updated version will present a comprehensive and consolidated framework, taking into account over 285 suggestions proposed by the committee in its exhaustive 4,500-page report submitted on July 21.
Here’s a closer look at some of the key reforms proposed in the upcoming bill — changes that promise relief for honest taxpayers, especially those dealing with income from house properties or refund delays due to TDS and TCS.
Major Reform: Clarity and Expansion in House Property Income Tax Rules
If you own property in India — whether occupied by you or rented out — the proposed changes could significantly ease your tax burden.
- Standard Deduction Clarity:
The committee recommends that the existing 30% standard deduction (post-municipal tax) — currently inferred but not clearly stated — should be explicitly included in the new law. This would remove ambiguity and make calculations simpler for taxpayers and professionals alike. - Home Loan Interest on Rented Property:
One of the most taxpayer-friendly suggestions is to extend home loan interest deductions to rented properties as well — a benefit currently limited to self-occupied properties. If accepted, this could bring relief to millions of homeowners who let out their second or investment properties.
Faster, Transparent TDS and TCS Refunds on the Horizon
Refund delays have long been a pain point for salaried and small business taxpayers alike. The committee’s recommendations include a revamp of the TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) refund mechanisms.
The goal is to make the refund process quicker, simpler, and more transparent, reducing the waiting period that taxpayers currently face.
This aligns with the CBDT’s broader policy shift towards “Enforcement with Empathy” — a new philosophy focused on making tax compliance less burdensome for honest taxpayers while still enforcing accountability where needed.
Why Was the Bill Withdrawn and Reintroduced?
The withdrawal of the original bill — and reintroduction of a new version — is a procedural step to ensure Parliament reviews only the most updated draft, fully integrated with committee recommendations. This prevents legislative overlap and ensures a cleaner debate in the House.
“The idea is to present a refined, unified version with all recommended improvements baked in, rather than asking MPs to juggle multiple amendment notes,” said a senior government
