Govt Withdraws First Draft of Income Tax Bill 2025, New Version Coming Soon

The government has officially withdrawn the first version of the Income Tax Bill, 2025, which was initially tabled in the Lok Sabha on February 13, 2025, to replace the long-standing Income-Tax Act, 1961.

According to sources, a revised version will be introduced on August 11, incorporating most of the suggestions made by the Select Committee chaired by Baijayant Panda. This move aims to provide a clear, updated, and consolidated Bill rather than releasing multiple versions that could cause confusion.

Key Features of the New Income Tax Bill

• Implementation Target: April 1, 2026

• Objective: Simplify language, eliminate redundancy, and streamline processes to enhance the taxpayer experience

• Historical Context: The current 1961 Act has been amended 65 times with over 4,000 changes to its provisions

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No Change in Tax Rates

The income tax department has clarified that the Bill does not propose any change in existing tax rates, including those on long-term capital gains (LTCG). Any confusion on this matter will be addressed during the Bill’s passage in Parliament.

Once enacted, the new legislation will replace the Income-Tax Act, 1961, which has been in effect since April 1, 1962.

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