Revised Income Tax Bill to simplify laws, ease filing, and benefit middle class and MSMEs

Govt Withdraws Income Tax Bill 2025,New Draft Soon

The government has formally withdrawn the Income Tax Bill, 2025, which was introduced in the Lok Sabha on February 13 to replace the existing Income Tax Act, 1961.
A revised version, incorporating most of the recommendations from the Select Committee chaired by BJP MP Baijayant Jay Panda, will be presented in Parliament on Monday, according to official sources.
The decision to withdraw the earlier draft aims to prevent confusion caused by multiple versions and to provide legislators with a clear, updated text containing all amendments in one place.
Panda, who led the Parliamentary Select Committee&rsquo;s review, said the new law will simplify India&rsquo;s decades-old tax framework, reduce legal complexity, and help individuals and MSMEs avoid prolonged litigation.
&ldquo;The current Income Tax Act of 1961 has been amended more than 4,000 times and contains over five lakh words. It&rsquo;s become overly complex. The new bill simplifies it by almost 50 per cent, making it far easier for ordinary taxpayers to read and understand,&rdquo; he said.
Small business owners and MSMEs, who often lack the resources to navigate complicated tax rules, are expected to benefit the most from the changes.
The revised bill aims to create a fair and equitable system of direct taxation without adding to the tax burden of the working and middle classes. Changes to slabs and rates are designed to lower taxes for the middle class, leaving more disposable income in households and boosting consumption, savings, and investment.
Under the Finance Act, 2025, the income threshold for claiming a tax rebate under section 87A of the Income Tax Act for resident individuals in the new tax regime (section 115 BAC) has been raised from ₹7 lakh to ₹12 lakh. The maximum rebate amount has also been increased from ₹25,000 to ₹60,000.
Marginal relief will continue to apply for incomes slightly above ₹12 lakh, as outlined by the Finance Ministry. The government said the new bill will make filing taxes easier for both ordinary citizens and small businesses. [Except for the headline, this article has not been edited by the Benefit News editorial team and is published directly from the IANS news feed]

8 ઑગસ્ટ, 2025 | 18:31 IST

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