Government Withdraws Income-Tax Bill, 2025

On 8th August 2025, Union Finance Minister moved to withdraw the Income-Tax Bill, 2025, in the Lok Sabha after considering suggestions from the 31-member Select Committee.

Key Points

Select Committee Review: The panel presented its 4,584-page report on July 21, 2025, making 566 suggestions aimed at simplifying the proposed law’s language and structure, and aligning it with current economic and legal contexts.
Taxpayer Relief: Recommended amending the provision that disallows refunds for income tax returns filed after the due date.
MSME Alignment: Suggested aligning the definition of micro and small enterprises with that in the MSME Act.
Non-Profit Clarity: Proposed clarifications on terms like ‘income’ vs. ‘receipts,’ treatment of anonymous donations, and removal of the deemed application concept to reduce legal disputes.
Procedural Improvements: Recommended clearer rules on advance ruling fees, TDS on provident funds, low-tax certificates, and penalty powers under the law.