The Select Committee on the new Income Tax Bill will lay its report in Parliament on Monday. The government aims to get the bill passed during the Monsoon Session.
According to Lok Sabha’s list of Business, Chairman of the Select Committee and BJP MP Baijayant Panda and member of the Committee and NCP (Pawar) MP Supriya Sule will table the report along with record of evidence. According to sources, the Committee has made 285 suggestions and at its meeting on July 16 adopted the report on new I-T Bill, 2025. Now, it is up to the government which recommendations they accept and accordingly make changes in the bill, get it approved from the Cabinet and move the reworked bill for consideration and passage.
Minimises scope of litigation
The simplified Income Tax Bill, which is half the size of the 1961 Income Tax Act, seeks to achieve tax certainty by minimising the scope of litigation and fresh interpretation. The new bill, introduced in the Lok Sabha, has a word count of 2.6 lakh, lower than 5.12 lakh in the I-T Act. The number of sections is 536, as against 819 effective sections in the existing law.
The number of chapters has also been halved to 23 from 47, according to the FAQs (frequently asked questions) issued by the I-T department. The Income Tax Bill 2025 has 57 tables, compared to 18 in the existing Act and removed 1,200 provisos and 900 explanations.
In a taxpayer-friendly move, the Bill replaces the term ‘previous year’ as mentioned in the Income Tax Act, 1961 with ‘tax year’. Also, the concept of assessment year has been done away with. Currently, for income earned in the previous year (say 2023-24), tax is paid in assessment year (say 2024-25). This previous year and assessment year (AY) concept has been removed and only tax year under the simplified bill has been brought in.
The panel is believed to have suggested redefining the power status of Income-Tax authorities regarding discovery and production of evidence. It has reportedly rearranged the definition of associated enterprises. However, it has not recommended including company secretary cost accountant in the definition of ‘accountant.’
NPA dispute
The bill also intends to resolve the long-standing dispute over the definition of Non-Performing Assets (NPAs). The Select Committee has also called for more clarity on the proposed provision.
The government is aiming to present an Income Tax Bill, 2025, that is not a mere set of tweaks in the earlier Income-Tax Act, but a comprehensive code that rewrites how income is taxed, who pays it, and how the system will be governed. The legislation spans everything from digital documentation to dispute resolution, international taxation to non-profit oversight, all tied together in a modernised architecture aimed at clarity, compliance, and control.
Through the new Bill, the government seeks to consolidate and simplify India’s fragmented and often arcane Income-Tax laws. The objective it to do away with the Income-tax Act of 1961, replacing it with a codified structure that reflects the economic realities and technological possibilities of today’s India.
