New Delhi: Union Finance Minister Nirmala Sitharaman on Monday introduced the revised Income Tax Bill in the Lok Sabha, aiming to replace the outdated Income Tax Act of 1961 with a modernized framework. The bill is part of the government’s efforts to bring key reforms to India’s economic system.
The original bill, introduced in February, faced opposition over certain technical and policy issues, prompting the government to refer it to a Parliamentary Select Committee. Chaired by Baijayant Panda, the committee submitted a comprehensive 4,500-page report last month with 285 recommendations, many of which have been incorporated into the revised bill.
Sitharaman emphasized that the reforms seek to simplify and clarify the tax system for taxpayers.
Mitron, #LokSabha just passed the 500+ clause #IncomeTaxBill WITHOUT any debate, within JUST 3 MINUTES 👏👏 (Must see video👇)
But it didn't stop at that!
Immediately after that, the Taxation Laws (Amendment) Bill, 2025 was also passed WITHOUT any debate, in next 1 MINUTE 👏👏… pic.twitter.com/OvjGzR2AkT
— Maadhyam (@maadhyam_engage) August 11, 2025
Key Amendments in the Revised Income Tax Bill:
* Taxpayers can claim refunds even if returns are filed late, providing greater relief.
* The deemed rent tax on vacant properties has been removed. A 30% standard deduction will apply to rental income after municipal taxes are deducted.
* Interest deduction on home loans will extend to rented properties as well.
* Tax exemption on commuted pension is now available to non-salaried individuals.
* Ambiguous provisions have been eliminated to reduce tax disputes.
* The bill replaces the ‘Previous Year’ and ‘Assessment Year’ concepts with a simplified ‘Tax Year’ system.
Experts say the bill will benefit taxpayers and streamline tax administration. After Lok Sabha approval, the bill will be sent to Rajya Sabha. It is expected to come into effect from April 1, 2026.