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The New Income Tax Bill 2025 represents a significant overhaul of India's existing income tax legislation, aiming to modernize and simplify the tax regime for both individuals and corporations. Finance Minister Nirmala Sitharaman presented the updated version of the bill to Parliament, incorporating changes suggested by the Parliamentary Select Committee. This move signals a commitment to streamlining tax procedures, reducing compliance burdens, and fostering a more predictable and transparent taxation framework, crucial for promoting economic growth and attracting investments. The bill seeks to replace the Income Tax Act of 1961, a legislation that had become increasingly complex and cumbersome over the decades, with numerous amendments and interpretations. The rationale behind the new bill is to create a more user-friendly and efficient tax system that encourages compliance and reduces the scope for disputes. The updated version addresses concerns raised by stakeholders and incorporates recommendations from the Parliamentary Select Committee, indicating a collaborative approach to legislative reform. One of the key highlights of the New Income Tax Bill 2025 is its emphasis on simplification. The proposed legislation reduces the text volume and the number of sections by approximately 50%, presenting the provisions in a more straightforward and comprehensible manner. This reduction in complexity is expected to significantly ease the burden of compliance for taxpayers, particularly individuals and small businesses who often struggle to navigate the intricacies of the existing tax laws. The bill also simplifies the taxation timeline by eliminating the complex distinction between the assessment year and the previous year, introducing a unified 'tax year' concept. This change aims to reduce confusion and make it easier for taxpayers to understand their tax obligations. Another significant provision in the revised I-T bill allows taxpayers to claim refunds even when returns are submitted after the deadlines. This provision offers significant relief to individuals who may have inadvertently missed the filing deadlines or faced genuine difficulties in submitting their returns on time. This demonstrates a more taxpayer-friendly approach and recognizes that delays are not always intentional or indicative of tax evasion. The New Income Tax Bill 2025 also retains existing provisions for carrying forward losses, ensuring that businesses can offset losses incurred in previous years against future profits. This is particularly important for businesses operating in volatile sectors or those that have experienced temporary setbacks. The bill also provides tax relief on anonymous donations to religious trusts, which could encourage charitable giving and support religious institutions. Furthermore, the bill adjusts MSME (micro, small and medium enterprises) classifications to align with the MSME Act, incorporating the panel's suggested modifications. This alignment aims to provide clarity and consistency in the tax treatment of MSMEs and ensure that they receive the appropriate benefits and incentives. The duration for submitting TDS correction statements has been shortened to two years from the previous six years under the Income-tax Act, 1961. This reduction is expected to substantially decrease complaints from deductees, as it allows for quicker resolution of discrepancies and reduces the administrative burden on both taxpayers and the tax authorities. The New Income Tax Bill has additionally provided explicit clarification regarding deductions applicable to commuted pension and gratuity payments received by family members. This clarification removes ambiguity and ensures that family members receiving these payments are aware of their tax obligations. Tax experts have indicated that the reforms would simplify compliance procedures for individuals, organizations, and MSMEs while fostering a reliable, foreseeable, and lucid taxation framework. This framework is essential for maintaining domestic spending, drawing overseas investments, and backing economic expansion. A clear and predictable tax system reduces uncertainty for businesses and investors, encouraging them to allocate capital and resources more efficiently. Gouri Puri, partner at Shardul Amarchand Mangaldas and Co, noted that the initial proposal created uncertainty, particularly concerning residential property taxation, pension deductions, and reimbursement procedures for late submissions. The revised bill addresses these gaps to simplify interpretation, reduce disputes, and promote fairness. The updated I-T Bill seeks to remove unnecessary and duplicate clauses for improved navigation, systematically reorganizing sections for easier reference. It employs straightforward terminology to enhance accessibility and has eliminated outdated provisions to achieve better clarity. The requirement for compulsory investment and deposit of deemed accumulated income, previously set at 15% of regular income in designated modes, has been eliminated. Additionally, clause 187 has been expanded by incorporating the term 'profession' following 'business', allowing professionals whose total receipts surpass Rs 50 crore annually to access prescribed electronic payment methods. The parliamentary committee proposed 285 suggestions to streamline and update the taxation framework. The withdrawal of the earlier I-T bill and the introduction of a revised version demonstrates the government's responsiveness to stakeholder feedback and the Select Parliamentary committee's recommendations.