Sitharaman Pulls Income Tax Bill; New One Coming August 11 After Lawmaker Review
NEW DELHI, India – August 8, 2025: Finance Minister Nirmala Sitharaman has decided to scrap the Income-Tax Bill, 2025, in Parliament today. She said they needed to put in a bunch of suggestions and fix some mistakes that lawmakers noticed. Now, a fresh, fixed-up Bill is coming on August 11. Think of it as the original, but better. The first version popped up in February and aimed to totally redo India’s tax laws, since the old Income-Tax Act from 1961 is, well, ancient.
Why the Change and How It Works
Sitharaman told everyone that the big reason for the change was this group of 31 lawmakers who dug deep into the bill. This group, headed by BJP MP Baijayant Panda, dropped a huge report—over 4,500 pages!—back on July 21. It was full of ideas—285 of them, to be exact—on how to make the bill better.
The Finance Minister said these fixes were important so the law would make sense. She said it was about getting the wording right, making sure things lined up, and fixing references. Instead of just slapping on a ton of changes, they thought it would be easier to just pull the whole thing and start fresh with a version that’s clear for everyone.
What’s Going into the New Bill
That lawmaker group had some really important ideas, and the government said they’re using most of them in the new bill. One big thing they chatted about was income from houses. The group said that the standard 30% cut for house income should be figured out after you take out local taxes. That way, there’s no confusion in the rules.
Another cool idea was about interest before a house is built. The group figured this break should still be around for properties that are rented out, not just for ones people live in. This keeps things consistent with how taxes work now and helps out more people.
Changes for Charities and Refunds
The group also looked at rules for nonprofits and how people get their refunds. They suggested keeping the tax break for donations where the donor stays secret when donating to religious charities. The new bill keeps a version of this, but it sounds like it will only cover purely religious trusts, and other charities might get taxed.
For regular folks, getting refunds from TDS (Tax Deducted at Source) should be easier and faster. The group also said people should be able to claim TDS refunds even if they miss the deadline to file their taxes, without getting penalized. The government wants to be more trusting first and check things later.
The Big Picture: Modernizing Taxes
The main idea behind the first Income-Tax Bill, 2025, is still what they’re trying to do. They want to update and make India’s tax laws simpler, swapping out the old 1961 Act for something shorter and easier to understand. The new bill should have simpler wording, fewer penalties for some stuff, and get rid of unnecessary rules.
Don’t expect any changes to tax brackets or how capital gains are taxed. But the new bill will have all those important fixes the lawmakers suggested. It’s all about making things clearer, having fewer lawsuits, and making it easier to follow the rules, hopefully by April 1, 2026.
Background and What’s Next
Pulling and redoing this bill is kind of a big deal. The Income-Tax Act, 1961, has been changed over 300 times, so it’s a mess. This whole thing started with the bill on February 13, 2025, then went to that lawmaker group. It’s the biggest attempt in ages to make a modern tax law.
With the new bill coming on August 11, it all starts again. The government hopes that listening to the lawmakers and everyone else will make the final law better and fairer for India’s economy.
