Nirmala Sitharaman withdraws Income Tax Bill in Lok Sabha, New Bill to be introduced on 11 August

On August 8, 2025, Finance Minister Nirmala Sitharaman announced in the Lok Sabha that the Income Tax Bill, 2025 has been officially withdrawn. The government plans to introduce a revised version of the Bill in Parliament on August 11. Some changes have been implemented in the new income tax bill and the government will present the bill in lok sabha for approval. The details and provisions of new bill will be released only after the bill is presented in lok sabha on 11 August.

Why was the original Bill withdrawn?

After the Income Tax Bill was introduced earlier this year on February 13, it was sent to a Select Committee for further review. This committee, headed by Baijayant Panda, looked at the details of the Bill and gave several suggestions for improvement. To avoid confusion between multiple versions and amendments, the government has decided to withdraw the old Bill completely and bring a fresh and updated version. This new bill will have the changes recommended by the committee.

What changes were suggested by the Select Committee?

The 31-member Select Committee has proposed several key recommendations, including:

• Continuation of tax exemptions on anonymous donations made to purely religious trusts.
• However, if a religious trust also performs charitable activities (like running schools or hospitals), then anonymous donations received by such trusts will be taxed.
• The committee also recommended that taxpayers should be allowed to claim TDS refunds (Tax Deducted at Source) even after the ITR filing due date, without any penalty.

These recommendations are expected to benefit the citizens of India. The new Bill is meant to replace the existing Income Tax Act of 1961, which has been in use for more than 60 years. The government aims to modernize the income tax system, make it more transparent, and reduce legal complexities.

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