Revised Income-Tax Bill Tabled in Lok Sabha by Finance Minister Sitharaman

Key highlights of the Revised Income-Tax Bill 2025

• The bill replaces the complex Income Tax Act, 1961, simplifying tax laws by nearly 50% for better clarity and ease of understanding.
• It incorporates almost all of the 285 recommendations from the Select Committee, addressing errors, ambiguities, and stakeholder concerns.
• Revised tax slabs and rates aim to reduce middle-class tax burdens, boost disposable income, and encourage savings and investments.

Union finance Minister Nirmala Sitharaman On Monday August 11, presented the “revised” bill. This bill seeks to replace Income Tax Act, 1961. This new bill simplifies the financial related legislation and provided clarity, making it easy to be understood by ordinary taxpayers.

Recommendations Provided by Select Committee

The Parliamentary select committee headed by BJP leader Baijayant Panda provided in total of 285 recommendations for the revised draft. FM Sitharaman mentioned inclusion of almost all recommendations of Select committee in revised bill.

“Almost all of the recommendations of the Select Committee have been accepted by the government. In addition, stakeholders suggested changes. These changes would convey the proposed legal meaning more accurately,” said the statement of objects and reasons of the bill.

Why Need for Revised Income-Tax bill?

Presenting the bill, Nirmala Sitharaman said The Income-Tax (No.2) Bill, 2025 seeks to consolidate and amend the law associated with income tax and will replace the current Act. On Friday, Sitharaman withdrew the original version of the new bill. This happened during the Monsoon Session of the Lok Sabha. Finance minister mentioned about the irregularities in the previous Income tax Act, 1961.

According to Panda, the new legislation will simplify India’s decades-old tax structure. It will reduce legal confusion. It will help individual taxpayers and MSMEs avoid unnecessary litigation. The current Income Tax Act, enacted in 1961, has undergone more than 4,000 amendments and now contains over five lakh words, making it highly complex.

What new legislation, Income-tax bill 2025 comprises of?

 Panda noted that the new bill simplifies the law by nearly 50 per cent. This change makes it far easier for ordinary taxpayers to read and understand. The committee had flagged multiple drafting errors and suggested amendments to reduce ambiguity.

In the revised bill, slabs and rates have been adjusted across the board to benefit all taxpayers. The government said the new structure will substantially reduce taxes for the middle class. This change will leave more disposable income in their hands. It will boost consumption, savings, and investments.

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