FM Sitharaman withdraws Income Tax Bill, revised draft to be tabled Aug 11

New Delhi, Aug 8, 2025

Finance minister will submit a revised version of the I-T Bill, incorporating most of the Select Committee's recommendations

Finance Minister Nirmala Sitharaman on Friday formally withdrew the Income Tax Bill, 2025, in the Lok Sabha after the Select Committee, chaired by BJP MP Baijayant Panda, submitted its report on the draft legislation.

A revised version of the Bill, incorporating most of the Committee’s recommendations, is expected to be introduced in Parliament on August 11, officials said.

The decision to withdraw and reintroduce a single, updated version is meant to avoid confusion from multiple drafts and ensure that the House considers a comprehensive, consensus-based text.

The original bill had been introduced on February 13.

According to PTI, several critical changes have been made in the updated draft:

Anonymous donations to purely religious non-profit organisations (NPOs) will continue to enjoy tax exemption.

Religious-cum-charitable trusts (such as those operating schools or hospitals) will be taxed on such donations.

Taxpayers may be allowed to claim TDS refunds even after the I-T return filing due date, without facing a penalty.

Once passed, the revised bill will replace the existing Income Tax Act of 1961 and is expected to modernise India’s tax code to suit digital-era requirements.

The 31-member Select Committee, chaired by BJP MP Baijayant Panda, was set up soon after the Bill’s initial introduction to facilitate stakeholder consultations and expert feedback.

Most of the panel’s suggestions have been accepted, including those aimed at improving transparency and taxpayer convenience.

The bill, which will be reintroduced to Parliament on Monday, is expected to focus on simplification, enhanced digital integration, and a more contemporary framework for compliance.

[The Business Standard]