Revised Income Tax Bill 2025: Key changes every taxpayers need to know..!

Investment Guru Tuesday, August 12, 2025 0

Revised Income Tax Bill 2025: Key changes every taxpayers need to know..!

By Mr. S.Kumar,

Regd. - Income-Tax Practitioner,

Designated Partner - Neena Capital Services LLP,

The union government formally withdrew the old draft of the Income Tax Bill, 2025 introduced in Parliament on 2025 August 8. This is the same bill which was introduced during the Budget session in 2025 February and was immediately sent to the Select Committee.

1961 law Verses new bill of 2025: what are the difference?

The old Income Tax Act, 1961 has been in force for decades, but its language and structure have often proved confusing for the common man. The new bill has been brought with the intention of changing it completely.

It will have 536 sections and 16 schedules, which have been arranged in a clean manner.

1 There will now be a single concept of “Tax Year” instead of “Previous Year” and “Assessment Year”.

2 Unnecessary and contradictory provisions have been removed to reduce litigation.

3 CBDT has been given more power to make rules according to the digital age.

4 In simple words, the new law will be much easier to read, understand and implement than the old one.

Some of these important recommendations by the Select Committee were –

5 Flexibility in tax refund – Those who file returns late will also get the right to refund.

6 Dividend relief – Rs 80M deduction on inter-corporate dividends will be reintroduced.The reintroduction of Section 80M to eliminate double taxation on inter-corporate dividends

7 NIL-TDS option – Those who do not have tax liability will be able to obtain advance NIL-TDS certificate.

8 Tax relief on vacant house – Provision of taxing only notional rent removed.

9 Clarity in house property deduction – 30% standard deduction after deducting municipal tax, and interest deduction on rented property will also be available.

10. Simplification of compliance rules – Provisions related to TDS on PF withdrawal, advance ruling fees and penalties clarified.

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