Finance Minister Nirmala Sitharaman says updated Bill will integrate Select Committee’s recommendations for a simpler tax regime
Bill Withdrawn to Avoid Confusion
The Income Tax Bill 2025, introduced in the Lok Sabha on February 13, has been withdrawn. It was meant to replace the Income Tax Act of 1961.
Finance Minister Nirmala Sitharaman announced the withdrawal after the Select Committee, led by BJP’s Baijayant Panda, submitted its report.
A new version of the Bill will be introduced on August 11. This version will include all the committee’s recommendations. This will avoid confusion caused by multiple drafts.
Opposition’s Reaction to the February Draft
When the Bill was first presented:
- Several Opposition members walked out.
- Congress leader Manish Tewari and RSP’s NK Premchandran said the draft was more complex than the current law.
- TMC’s Saugata Roy called it “mechanical.”
Government’s Response: A Simpler Structure
Ms. Sitharaman said the criticism was wrong.
- The current law has over 800 sections. The new Bill has only 536.
- The new tax system follows five key principles, called S.I.M.P.L.E:
- S – Streamlined language and structure
- I – Integrated and concise
- M – Minimized litigation
- P – Practical and transparent
- L – Learn and adapt
- E – Efficient tax reforms
What’s Next?
The new Bill will:
- Use most committee suggestions.
- Modernize the tax code.
- Make tax compliance easy.
- Reduce disputes between taxpayers and the tax office.
This updated Bill aims to make India’s tax system simpler and fairer for everyone. Its success will depend on clear rules and easy compliance for all taxpayers.
