Lok Sabha Passes New Income-Tax Bill Without Debate Amid Opposition Uproar

The legislation replaces the Income Tax Act of 1961 and incorporates about 285 recommendations from the parliamentary committee, which last month submitted an extensive 4,500-page report.

The government had withdrawn that earlier version from the House last week, assuring lawmakers that a more refined draft—fully reflecting the committee’s inputs—would be tabled.

Source : PTI

Union Finance Minister Nirmala Sitharaman on Monday tabled the Income-Tax (No. 2) Bill, 2025, along with the Taxation Laws (Amendment) Bill, 2025, in the Lok Sabha.

#WATCH | Union Finance Minister Nirmala Sitharaman introduces the Income-Tax (No.2) Bill, 2025 and the Taxation Laws (Amendment) Bill, 2025 in Lok Sabha.

(Source: Sansad TV) pic.twitter.com/pnmbSGHJHc

— ANI (@ANI) August 11, 2025

The Parliament gave its approval for the bill just hours after the minister introduced it. However, it did so without any discussion due to ongoing opposition protests. The passage came the same day the bill was introduced, following the government’s decision last Friday to withdraw the earlier Income-Tax Bill, 2025, from the House.

The fresh draft incorporates nearly all recommendations made by the Select Committee, which was tasked with examining the earlier version.

The legislation replaces the Income Tax Act of 1961 and incorporates about 285 recommendations from the parliamentary committee, which last month submitted an extensive 4,500-page report. The initial draft of the bill had been presented in February during the Budget session.

The government had withdrawn that earlier version from the House last week, assuring lawmakers that a more refined draft—fully reflecting the committee’s inputs—would be tabled.

Key Changes in the Revised Draft

The updated bill now adopts the bulk of suggestions put forward by the Select Committee, which scrutinised the proposal following its Budget session introduction. The amendments primarily aim to simplify the text, ensure consistent terminology, make consequential corrections, and strengthen cross-references throughout the legislation.

A significant provision addresses anonymous donations to religious and charitable trusts. Under the new draft, exemptions for such contributions will remain only for trusts engaged purely in religious activities. In cases where religious trusts also manage charitable initiatives—such as running schools, colleges, or hospitals—anonymous donations will no longer be exempt and will instead attract tax.

The government in July announced that all tax benefits available under the New Pension Scheme (NPS) shall apply to the Unified Pension Scheme (UPS), which was implemented from April 1, 2025.

Commenting on the new income tax bill, Vivek Jalan, Partner, Tax Connect Advisory Services LLP, noted, "Many of the suggestions of the taxpayers, Trade & Industry have been accepted by the Baijayant Panda Select Committee. Such changes require that certain clauses/ words/ sentences/ etc are added or deleted to or from the Feb’25 Income Tax Bill. These have been accepted by The CBDT. For example Clause 263(1)(a)(ix) of The Feb’25 Income Tax Bill 2025 required that a person seeking refunds under Chapter XX  must mandatorily file Income Tax Returns within "due date". Considering this representation and that such a provision would create a hardship for all taxpayers who miss the due dates due to genuine reasons, The Ministry of Finance, while finalising the draft Income Tax Bill 2025 has appropriately deleted clause 263(1)(a)(ix) so that there is no unnecessary litigation in this matter which would have impacted all taxpayers. The New Income Tax Bill which is re-tabled today, 11th August 2025, sees that Clause (ix) is removed and the later clauses has moved up i.e. Clause (x) has become the new Clause (ix)."