FM Withdraws IT Bill, Revised Draft on Aug 11

08-Aug-2025 08:10 PM

New Delhi. Union Finance Minister Nirmala Sitharaman today i.e. on August 8 (Friday) formally withdrew the Income Tax Bill (Income Tax Bill) 2025 in the Lok Sabha.

The Finance Minister announced the withdrawal of the bill after the Select Committee headed by BJP MP Vaijayant Panda presented its report on the draft legislation.

Now the revised draft of this bill is likely to be presented in Parliament on August 11, 2025, in which most of the advice and recommendations of the committee can be included.

The main objective of withdrawing the existing bill and reintroducing a single and updated surgeon is to remove the confusion arising from various drafts and to ensure that the House (Parliament) considers a comprehensive, consolidated and unanimous provisions.

It is noteworthy that the original draft of the Income Tax Bill was presented in Parliament on 13 February 2025. According to informed sources, many important changes have been made in this updated draft.

Under this, voluntary donations given to purely religious non-profit organizations (NPOs) will continue to get the benefit of tax exemption. But such grants received from religious-cum-charitable trusts will be taxed.

This includes trusts running schools and hospitals etc. Taxpayers may be allowed to claim TDS refund without paying any penalty even after filing income tax returns on time.

If the revised draft of the Income Tax Bill is passed by Parliament, it will replace the existing Income Tax Act 1961 and after that India's tax code is expected to be modernized, which will be suitable for the needs of the digital age.

The 31-member select committee was formed immediately after the Income Tax Bill was presented in Parliament in the initial stage so that feedback could be obtained by consulting all the concerned parties and experts.