Income-Tax overhaul paused: February Bill withdrawn, new version on August 11

The Income-Tax Bill, 2025, initially introduced in the Lok Sabha on February 13, to replace the decades-old Income-Tax Act, 1961, has been formally withdrawn, a government source said.

The decision was taken to introduce a revised version of the bill, incorporating key recommendations from the 31-member Select Committee chaired by Baijayant Panda, in the Lok Sabha on Monday.

The new bill integrates most of the Select Committee’s suggestions, reflecting a comprehensive review to modernize India’s tax framework while addressing stakeholder concerns.

Government sources emphasized that the revised bill will provide clarity and incorporate changes to ensure a more robust and taxpayer-friendly system.

Announced in the full Budget for 2024-25 (Apr-Mar), the new Income Tax Bill aims to simplify the Income Tax Act, 1961, and make it easier for taxpayers to calculate taxes and file returns.

Procedurally, the bill aims to give greater autonomy and powers to the income tax department and government to bring about policy changes and amnesty schemes for taxpayers. The government, however, will have to lay these notifications before each House of the Parliament after issuing them.

With inputs from PTI.