Winning Bizness Desk
Mumbai.The New Income Tax Bill 2025 is set to be tabled in Parliament on Monday, August 11. The proposed legislation has already generated significant discussion. A select committee tasked with reviewing the bill has submitted several key recommendations aimed at making the tax law simpler, clearer, and more aligned with the current system.
Parliamentary panel’s report runs into thousands of pages
The parliamentary panel presented its detailed report to the Lok Sabha on July 21. The report runs into 4,584 pages and contains a total of 566 recommendations. Out of these, the committee has highlighted 10 major points that could shape the final draft of the bill. These suggestions are designed to remove confusion, tighten definitions, and improve alignment with existing frameworks.
Focus on simplifying and clarifying tax law
The committee engaged in extensive discussions before finalising its inputs, delivering 285 recommendations specifically aimed at simplifying the tax system and making the Income Tax Act easier to understand. Many of these changes were based on feedback from various stakeholders, with the intent of improving transparency and ensuring the provisions are practical for both taxpayers and administrators.
Proposal to relax certain refund rules
One of the standout suggestions is to remove a rule that denies income tax refunds if the income tax return (ITR) is filed late. In the existing draft, taxpayers must file their ITR on time to be eligible for a refund. The panel recommends scrapping this restriction, which could provide relief to many individuals who miss deadlines but are still entitled to refunds.
Changes to corporate dividend deductions and TDS rules
The committee has suggested an amendment to Section 80M (Clause 148 in the new bill), which deals with deductions on inter-corporate dividends for companies subject to special tax rates. It has also recommended allowing taxpayers to obtain zero TDS (Tax Deducted at Source) certificates. While some media reports hinted at changes in Long-Term Capital Gains (LTCG) tax rates, the Income Tax Department has clarified that the panel has not suggested any alterations to tax rates.
Recommendations for MSMEs and procedural clarity
Another key recommendation is to align the definition of micro and small enterprises with the MSME Act. The panel has also proposed changes to clarify rules related to advance ruling fees, TDS on provident funds, lower tax certificates, and the penalty powers of authorities. These procedural changes are intended to cut red tape and improve the efficiency of tax administration.
Key Points in a Nutshell
1. New Income Tax Bill 2025 to be tabled in Parliament on August 11.
2. Select committee submitted 566 recommendations, with 10 major proposed changes.
3. Focus on simplifying tax law and removing ambiguities.
4. Recommendation to remove rule denying refunds for late ITR filers.
5. Suggestion to amend corporate dividend deduction rules under Section 80M.
6. Proposal to allow taxpayers to get zero TDS certificates.
7. MSME definition to be aligned with MSME Act and procedural clarifications suggested.
