Union Finance Minister Nirmala Sitharaman will introduce the revised Income Tax Bill, 2025, in the Lok Sabha today after withdrawing the earlier version from the Lower House last week. The updated Bill, cleared by the Select Committee of Parliament, incorporates most of the 285 recommendations made by the committee, which examined the legislation in detail and submitted a comprehensive 4,500-page report last month.

The original Bill, aimed at replacing the Income Tax Act of 1961, was introduced in the Lok Sabha on February 13 this year during the Budget session. Soon after its introduction, it was referred to the Select Committee for review. The Finance Minister later withdrew the earlier version to present a single updated draft containing all the suggested changes, in order to avoid confusion from multiple versions. The government emphasised that the revised Bill builds on the work already done and incorporates the agreed recommendations rather than discarding the previous draft.

Parliamentary Affairs Minister Kiren Rijiju clarified that fears of an entirely new bill replacing the earlier one were unfounded. He said the new version would integrate all changes suggested by the Select Committee and accepted by the government, ensuring that the time and effort spent on the earlier draft would not be wasted. The committee, chaired by BJP MP Baijayant Panda, focused on simplifying the language of the legislation, aligning phrases, making consequential adjustments, and improving cross-referencing to enhance clarity.

One of the key recommendations accepted by the government relates to the treatment of anonymous donations. The new Bill continues the provision for tax exemption on anonymous donations made to religious-cum-charitable trusts. However, it clarifies that when a religious trust also engages in other charitable functions such as running educational institutions or hospitals, the anonymous donations received for those purposes will not be exempt and will be subject to tax.

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The Select Committee also received and considered other inputs from various stakeholders, ensuring the legislation aligns with contemporary needs while maintaining fairness and transparency in the tax regime. The Finance Ministry said the intention behind the revisions is to modernise tax laws, remove ambiguities, and make compliance easier for individuals and organisations.

By consolidating all changes into one document, the government aims to provide clarity to lawmakers, taxpayers, and professionals, ensuring a smooth legislative process. The revised Income Tax Bill, 2025, is expected to be debated in Parliament after its introduction, paving the way for a new tax framework to replace the six-decade-old Income Tax Act, 1961.