In a major legislative shift, the Income-Tax Bill, 2025, initially introduced in the Lok Sabha on February 13, 2025, has been formally withdrawn, sources confirmed to India Today TV. But this isn’t the end—rather, it marks a new beginning. A revised and refined version of the bill, reflecting significant feedback from a Select Committee led by Shri Baijayant Panda, is scheduled to be reintroduced on August 11.
The move, aimed at providing clarity and avoiding legislative clutter, will see the new bill replace the six-decade-old Income-Tax Act of 1961 with a more modern and transparent framework.
Why a New Version of the Income Tax Bill?
The decision to withdraw the previous version was not a rollback but a strategic step. With multiple amendments and over 285 suggestions compiled in a 4,500-page report submitted by the Select Committee to Parliament on July 21, it made sense to start afresh with a clean, updated draft. This approach ensures that lawmakers and citizens have a clear understanding of the new tax framework — without sifting through scattered revisions.
Key Recommendations That Matter to You
Among the vast sea of recommendations, a few stand out for ordinary taxpayers, particularly those who earn income from house property or face refund delays.
1. More Clarity and Relief on House Property Income
For many middle-class Indians, income from property is a crucial source of earnings. The proposed bill seeks to eliminate ambiguity and extend greater benefits under this category:
- Standard Deduction of 30% To Be Clearly Stated:
Currently applied after deducting municipal taxes, this 30% standard deduction has existed under the old regime but wasn’t clearly articulated. The committee now recommends explicitly mentioning it in the new bill, bringing transparency and clarity to the process. - Home Loan Interest Deductions on Rented Properties:
At present, homeowners can only claim home loan interest deductions on self-occupied properties. The new bill proposes to extend this benefit to rented properties as well — a game-changing move for millions who own additional properties or have migrated for work.
2. Faster, Fairer TDS and TCS Refunds
Delayed refunds for Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) have long been a frustration for taxpayers. The Select Committee has recommended streamlining this process to make it:
- Faster
- Easier to track
- More transparent
This proposal aligns with the broader vision of the Central Board of Direct Taxes (CBDT), which is working under a policy titled “Enforcement with Empathy” — a philosophy that prioritizes easing the tax burden on honest citizens while maintaining compliance mechanisms.
What to Expect on August 11
The reintroduction of the revised bill is expected to be one of the most significant legislative moments of the year. With reforms aimed at making taxation simpler, more equitable, and aligned with modern financial realities, this bill could mark a turning point in how Indian taxpayers interact with the system.
If adopted as proposed, the new Income-Tax Bill, 2025, may not just replace the outdated 1961 law — it could redefine the taxpayer experience in India altogether.
