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Finance Minister Nirmala Sitharaman on Monday introduced the new Income Tax Bill 2025 in the Lok Sabha. This revised bill incorporates most of the recommendations of the Parliamentary Select Committee and will form the basis for replacing the old 1961 Income Tax Act.
Finance Minister Nirmala Sitharaman on Monday introduced the new Income Tax Bill 2025 in the Lok Sabha. This revised bill incorporates most of the recommendations of the Parliamentary Select Committee and will form the basis for replacing the old Income Tax Act of 1961. The government had earlier decided to withdraw the Income Tax Bill 2025 introduced on February 13. Sources have informed CNBC TV18 about many things included in this bill.
1- Deduction available under 80M (IT Act, 1961) — (Section 148 of Income Tax Bill, 2025) — will now be available to companies that have opted for the new tax regime.
2- Commuted pension and gratuity deduction for family members has been provided under Clause 93 of the Income Tax Bill, 2025.
3- Provisions of MAT (Minimum Alternate Tax) and AMT (Alternate Minimum Tax) have been separated into two sub-sections under Section 206.
4- AMT provisions will apply only to non-corporate entities that have claimed deductions. LLPs whose income is only from capital gains will not be liable for AMT if they have not claimed any deduction.
5- Clause 187 has been amended to add the word ‘profession’ after ‘business’ to enable professionals whose total receipts exceed Rs 50 crore in a year to use the prescribed electronic payment mode.
6- Clause 263 (1)(ix) has been removed to allow claim of refund in cases where returns are not filed in due time.
7- Provisions relating to loss carry forward and set-off have been redrafted for better presentation but retain the same intent.
8- The concept of receipt has been replaced by the concept of income, as in the Income Tax Act, 1961.
9- The use of capital gains on acquisition of new capital asset by a registered non-profit organization will be treated as application of income, as in the Income Tax Act, 1961.
10- Where the application of regular income falls below 85 per cent of the regular income due to non-receipt or delayed receipt of such income during a tax year, such income, if opted by the taxpayer, shall be treated as application of income in the tax year in which such income is received.
11- The provisions relating to taxation of anonymous donation have been made in line with the existing provisions of the Income Tax Act, 1961 and exemption has also been provided to mixed purpose non-profit organizations.
12- Mixed object registered non-profit organization has been clearly defined.
13- The requirement of mandatory investment and deposit of deemed accumulated income of 15 per cent of regular income has been abolished.
14- The time period for filing details for TDS Correction Statements has been reduced from 6 years to 2 years, which is expected to reduce the complaints of tax deductors.
15- Those amendments of the Finance Act 2025, which were necessary to be included, have now been made part of the new bill.
16- The amendments made by the Taxation Laws (Amendment) Bill, 2025 have also been made part of the new bill.
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