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31-Member Lok Sabha Panel Recommends Key Changes to IT Bill, 2025

Over 30 Changes to Income Tax Bill Proposed by Lok Sabha Panel

On the Income Tax Bill, 2025, the 31-member select committee of the Lok Sabha suggested over 30 amendments in the bill, along with the definitions, clarification on various deductions, as well as reinstatement of a few provisions dropped in the bill. The report of the committee headed by BJP leader Baijayant Panda was presented in the Lok Sabha.

In the definition of capital asset, infrastructure capital company, MSME, amendments have been recommended by the committee while explaining property-related deductions, and reinforcing the ‘actual payment’ rule for business expenses.

The reinstatement provision has been offered by the committee to authorise the tax department to issue a nil withholding tax certificate for particular payments. From the draft bill, the same clause was removed, which earlier only allowed certificates for low TDS deductions. It suggests allowing the refund claims even where the returns are not submitted in time.

The report addresses matters of charitable and not-for-profit entities via advocating clearer definitions, substituting “receipts” with “income” for tax purposes, and restoring the concept of “deemed application”. Also, it recommends inclusion of professionals under electronic payment norms, prescribes qualifications for valuers, and recommends contextual fairness in GAAR provisions.

In relief, the committee said that the benefit of tax deduction pertinent to inter-corporate dividends in multi-tiered structures should be extended to companies that opt for the 22% tax rate, as is the case now.

In February, the Income Tax Bill, 2025, was introduced and referred to the select committee for proposing changes, if any. To ease the tax norms of the country, the Income Tax Bill has been drafted. From making any structural amendments, the bill has stayed away and focused on easing the language. No amendment has been suggested by the select committee in its report.

The majority of the revisions in the latest round are corrective and specify correcting the errors in drafting from the first draft released for public comment.

As per the report, suggestions comprising policy-level amendments go beyond the extent and objectives of the IT Bill 2025. Also, certain modifications have been rejected by the finance ministry by citing suggestions “that several suggestions received were outside the purview of the Committee’s mandate.”

Stakeholder suggestions concern correction in drafting errors, removal of ambiguities deriving from language changes to the extant Act, and coherent presentation of tax provisions.

Disclaimer:- "All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check."

Published by Arpit Kulshrestha
Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous. View more posts
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