House panel seeks relief for small taxpayers

A parliamentary panel on Monday suggested that the government make income-tax rebate provisions unambiguous and spare small taxpayers from mandatorily filing returns to claim refunds, even as some dissenting voices and experts criticised its report as a lost opportunity for making transformational changes.

- Rajeev Jayaswal

Member of Parliament Baijayant Panda, who is also the chairperson of the 31-member select committee of the Lok Sabha on Monday presented the report on the Income-Tax Bill, 2025 to the House, an official statement said. The Bill was introduced in the Lok Sabha on February 13 by finance minister Nirmala Sitharaman. After enactment it will replace the existing Income-Tax Act, 1961.

While the committee restricted its task to clause-wise simplification, it also proposed to exempt anonymous donations made to religious-cum-charitable trusts from taxation. The committee recognised “significant confusion” among Non-Profit Organisations (NPOs), especially those with mixed charitable and religious objectives, regarding the interpretation of wholly for charitable or religious purposes, the report said.

“This ambiguity could lead to uncertainty for existing trusts and those established after 1961, increasing litigation risks,” it said, asking the government to redraft the clause suitably.