Legislature Set to Present Revised Income Tax Bill on August 11th
Income Tax Bill, 2025: A Journey Through Parliament
The Income Tax Bill, 2025, which was initially introduced in the Indian Parliament on February 13, 2025, has taken a new course after a series of parliamentary processes aimed at modernizing and simplifying the nation's tax law.
The bill, which was intended to replace the Income Tax Act, 1961, was referred to a Select Committee of the Lok Sabha, chaired by BJP MP Baijayant Panda. The committee submitted its report on July 21, 2025, recommending extensive amendments to improve clarity and simplify compliance.
Following this, Finance Minister Nirmala Sitharaman withdrew the earlier version of the Income Tax Bill, 2025, on August 8, 2025, to incorporate these changes and ensure legislative clarity. The updated draft received Cabinet approval last Friday.
The revised bill, incorporating nearly all committee recommendations, was reintroduced and passed by the Lok Sabha on August 11, 2025, and then passed by the Rajya Sabha on August 12, 2025.
One of the major recommendations in the new Income Tax Bill is the restoration of the section 80M deduction for companies availing the special rate under section 115BAA. The bill also provides for taxpayers to apply for NIL TDS certificates.
The bill is expected to come into force from April 1, 2026, pending Presidential assent. This series of events reflects a thorough parliamentary process aimed at modernizing and simplifying India’s tax law while addressing feedback from stakeholders and parliamentarians.
Meanwhile, in a separate development, JM Financial Credit Solutions announced the sale of 2.1% stake in its Home Loans subsidiary for ₹65.5 Crore to Bajaj Finserv. The government's decision to introduce a single, updated version of the Income Tax Bill was taken to tackle the issue of multiple drafts being confusing. The recommendations focus on simplifying the structure and language of the tax code without altering tax rates or major policies.
Business and politics in India took a significant turn with the Income Tax Bill, 2025, as it underwent a series of parliamentary processes to modernize and simplify the nation's tax law.
The Finance Minister, Nirmala Sitharaman, played a crucial role in this process by withdrawing the earlier version of the bill to incorporate amendments from a Select Committee.
JM Financial Credit Solutions, on the other hand, made headlines in general-news by selling a 2.1% stake in its Home Loans subsidiary to Bajaj Finserv, a move usually rooted in business and finance.
Education about the new bill is important as it is expected to come into force from April 1, 2026, pending Presidential assent, and includes changes like the restoration of the section 80M deduction for companies availing the special rate under section 115BAA.
