Income Tax Bill 2025 withdrawn, new bill likely to be tabled today in Parliament

The Income Tax Bill, 2025, which was introduced to replace the existing Income Tax Act, 1961, has been formally withdrawn. A new version of the Income Tax Bill, incorporating most of the recommendations will be introduced in Parliament today.

To avoid confusion and to provide a clear and updated version with all the changes incorporated, the new version of the Income Tax Bill will be introduced for the consideration of the House. The new measures will play a significant role in creating a fair and equitable system of direct taxation that ensures no additional burden of direct taxes on the working and middle-class population of the country. 

According to BJP MP Baijayant Jay Panda, who chaired the Parliamentary Select Committee responsible for reviewing the legislation, the new law, once passed, will simplify India's decades-old tax structure, cut down legal confusion, and help individual taxpayers and MSMEs avoid unnecessary litigation.

"The current Income Tax Act of 1961 has undergone more than 4,000 amendments and contains over 5 lakh words. It has become too complex. The new bill simplifies that by nearly 50 per cent -- making it far easier for ordinary taxpayers to read and understand," Panda said.

He further clarified that the greatest beneficiaries of this simplification would be small business owners and MSMEs who often lack the legal and financial expertise to navigate complicated tax structures.