Lok Sabha clears revised Income Tax Bill

The legislation aims to cut ambiguities, streamline TDS, and align tax rules with recent reforms

- Rajeev Jayaswal

The Lok Sabha on Monday passed the Income-Tax (No 2) Bill ~ a revised version of the earlier legislation - by extensively incorporating suggestions of the select committee of Parliament, which include further elimination of ambiguities for ease of taxpayers, enhancing ease of compliance, and aligning taxation laws with recent reforms.

“This bill seeks to repeal the Tncome-tax Act, 196] and reenact the proposed legislation...,” a memorandum attached with the bill said, mentioning that the purpose of the legislation is “to consolidate and amend the law relating to income-tax.”

The bill -passed in about three minutes with no discussion ~-seeks to provide relief to individual taxpayers by streamlining provisions of tax deduction at source (TDS) and other exemptions, besides permitting them to claim refunds without penalty even in the case of delayed filing of income-tax returns (ITRs). It also extends to companies that have opted for the new corporate tax regime certain tax deductions, available under the old regime, on dividends received from other firms.

The government on Friday had withdrawn the original bill, introduced in the House on February 13, to incorporate the recommendations of the committee.

The Lower House also passed another legislation - the Taxation Laws (Amendment) Bill, 2025 -- to amend the Income Tax Act, 196] and to amend the Finance Act, 2025 to facilitate investments from Saudi Arabia through certain direct tax benefits and for certain payouts to beneficiaries of the new pension scheme.