MUMBAI: The Income Tax Bill, 2025 is all set to be presented in parliament as the Monsoon session begins on Monday. The bill, which was tabled in Lok Sabha in February this year, will be presented again in parliament after being vetted by a select committee. The Committee made 285 suggestions in the Bill at its meeting on 16 July.
While most of the changes proposed were minor in nature – change in language and correction of typos – three key amendments suggested by the committee.
The committee has advised against the provision that would have disallowed income tax refunds if returns were submitted beyond the stipulated due date. This change offers considerable relief to taxpayers.
A proposal has also been made to bring back provisions enabling the tax department to issue a nil withholding tax certificate for specific payments. This clause was initially omitted from the draft bill, which previously only permitted certificates for low TDS deductions.
The 31-member select committee, which was headed by BJP leader Baijayant Panda, has also recommended the restoration of Section 80M allowing deduction in case of inter-corporate dividends. Its earlier removal had sparked concerns about potential double taxation within complex corporate structures. Reports indicate the government has accepted this recommendation, offering substantial relief to businesses.
According to Gaurav Makhijani, Head of Tax (North India and Gujarat) at Roedl and Partner, The Select Committee has taken into account most of the significant concerns raised and has sought to address areas that were causing ambiguity.
He points out that the definition of "resident" in cases of individuals going abroad for employment was unclear and wide, refunds could not be claimed if the return was not filed within the original due date, etc. “The select committee has recommended that this key issue be resolved,” says Guarav Makhijani.
However, he expresses his disappointment at the committee not proposing any change in rules related to application of the Alternate Minimum Tax (AMT) on LLPs and partnerships.
The main focus of the committee's recommendations is to accelerate the resolution of tax disputes. The panel has strongly advocated for the implementation of a time-bound mechanism for resolving tax litigations.
One of the members of the committee has said that the government has already 250 out of the 285 recommendations. Speaking to TNIE, a member of the committee said that the changes were very minor in nature as the government is not keen on any structural changes in the bill.
The new bill has a word count of 2.6 lakh, lower than 5.12 lakh in the existing Act. The number of sections is 536, as against 819 effective sections in the existing law. The number of chapters has also been halved to 23 from 47. The Bill has 57 tables, compared to 18 in the existing Act and removed 1,200 provisos and 900 explanations.