The Government of India has formally withdrawn the Income-Tax Bill, 2025, which was introduced in the Lok Sabha on February 13, 2025, to replace the six-decade-old Income-Tax Act, 1961. A revised draft, incorporating the recommendations of the Select Committee chaired by BJP MP Baijayant Panda, is scheduled to be presented in the House on August 11, 2025.
The original Bill sought to modernize India’s direct tax legislation by adopting simpler language, reducing penalties, retaining the existing tax structure, and fostering a taxpayer-friendly framework. However, officials stated that the decision to withdraw the Bill was taken to prevent confusion arising from the circulation of multiple versions and to ensure that lawmakers receive a single, consolidated draft reflecting all proposed amendments.
Finance Minister Nirmala Sitharaman, while addressing Parliament, explained that the withdrawal was necessitated by the need to incorporate certain suggestions to ensure accurate legislative interpretation. “Corrections in the nature of drafting, alignment of phrases, consequential changes, and cross-referencing are required,” she stated.
According to official sources, the updated version of the Bill will include most of the recommendations made by the Select Committee and will be tabled in the Lok Sabha on August 11 for further consideration.
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