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Explained: Why Centre withdrew Income Tax Bill 2025 and will submit a new one
The government said it would be coming out with an updated version of the Bill.
Finance Minister Nirmala Sitharaman on Friday withdrew the Income Tax Bill, 2025 in the Lok Sabha. The Bill was introduced in the Lower House of the Parliament on February 13 earlier this year, replacing the Income-Tax Act, 1961.
Sitharaman withdrew the Bill just before the House was adjourned after Krishna Prasad Tenneti, who was in the Chair, asked the Finance Minister to move for leave to do so.
While withdrawing the Bill, the government said it would be coming out with an updated version of the Bill, which would include the changes suggested by the Select Committee. The fresh version of the legislation will be introduced in the Lok Sabha on Monday (August 11).
The 31-member committee, chaired by BJP MP Baijayant Panda, had recommended changes to the current Bill. The updated version will incorporate most of the revisions suggested by the Select Committee, government sources said.
The updated legislation with all the changes will be introduced for the consideration of the House, in order to avoid confusion by multiple versions of the Bill.
The Bill, after being introduced in the House in February, was immediately referred to the Select Committee for its perusal.
The committee favoured the continuing of tax exemption on anonymous donations made to religious-cum-charitable trusts. The new Income Tax Bill exempts non-profit organisations from taxing anonymous donations received by religious trusts. However, the anonymous donations received by a religious trust which is also engaged in other charitable functions like running educational institutions and hospitals will not be a part of the exemption and will be taxed, the Bill says.
Among the suggestions made, the Committee also recommended that taxpayers should be allowed to claim TDS refund post the due date for filing ITR (Income Tax Returns), without being paying penal charges for the same.
