The much-anticipated Revised New Income Tax Bill 2025 is set to be tabled in Parliament on August 11, 2025, following significant recommendations from the 31-member Parliamentary Select Committee led by BJP MP Baijayant Panda. The earlier draft of the bill was withdrawn after the Committee suggested extensive changes aimed at making India’s tax laws more clear, simplified, and aligned with modern economic realities.
In this article, we break down the 10 most important changes recommended in the revised legislation.
1. Panel Report Presentation
The Select Committee’s report on the New Income Tax Bill was presented in the Lok Sabha on July 21, 2025. The panel emphasized tightening legal definitions, removing ambiguities, and ensuring the new tax law aligns with the existing regulatory framework for consistency.
2. 285 Recommendations for Simplification
The Committee made 285 targeted recommendations to simplify the tax regime. Their aim is to make the Income Tax law lucid, transparent, and user-friendly, benefiting both taxpayers and the administration.
3. Drafting Corrections for Clarity
Several drafting corrections were identified based on feedback from taxpayers, businesses, and experts. These corrections are designed to remove confusion and ensure the law is easy to interpret without the need for excessive legal intervention.
4. Total 566 Suggestions in 4,584-Page Report
The Parliamentary Panel’s final report is exhaustive—spanning 4,584 pages—and contains 566 total suggestions and recommendations covering different sections of the bill.
5. Relaxation on Income Tax Refund Rules
One of the most taxpayer-friendly changes removes the earlier restriction on refunds for late ITR filing. In the original draft, refunds were denied if the ITR was filed after the due date. The revised proposal allows refunds even if the return is filed late.
6. Section 80M Deduction Inclusion
The Select Committee suggested retaining the Section 80M deduction for inter-corporate dividends under clause 148 of the bill. This change benefits companies that avail the special corporate tax rate under Section 115BAA.
7. NIL TDS Certificate Availability
The revised bill proposes allowing taxpayers to apply for a NIL TDS (Tax Deducted at Source) certificate, offering relief to individuals and entities who otherwise face unnecessary tax deductions despite having no taxable liability.
8. No Change in Tax Rates
Contrary to earlier speculation, the Income Tax Department clarified that no changes in tax rates—including LTCG (Long-Term Capital Gains) rates—have been recommended in the revised bill.
9. MSME Definition Alignment
The Select Committee has recommended aligning the definition of Micro and Small Enterprises in the bill with the MSME Act. This ensures consistency across all laws and benefits small businesses seeking clarity in classification.
10. Amendments on Advance Ruling, TDS & Penalties
The report also recommends:
- Clarity on advance ruling fees
- Revisions to TDS rules on provident funds
- Guidelines for low-tax certificates
- Refining penalty powers for better transparenc
The Revised New Income Tax Bill 2025 is a landmark step toward simplifying India’s tax framework, making it more transparent and taxpayer-friendly. By removing ambiguities, ensuring legal clarity, and introducing taxpayer-centric measures like late refund eligibility and NIL TDS certificates, the bill could transform how citizens and businesses interact with India’s tax system.
The final bill will be introduced in Parliament on August 11, 2025, and its passage could mark the beginning of a more modern, accessible, and equitable taxation era in India