Govt withdraws first version of Income Tax Bill 2025: Sources

Govt withdraws first version of Income Tax Bill 2025: Sources

The Income Tax Bill, 2025, which was introduced in the Lok Sabha on February 13, 2025 to replace the existing Income-Tax Act, 1961, has been formally withdrawn, sources told Moneycontrol on August 8.

A new version of the Income Tax Bill, incorporating most of the recommendations made by the Select Committee chaired by Baijayant Panda, will be introduced on Monday, August 11, the sources added.

To avoid confusion by multiple versions of the Bill and to provide a clear and updated version with all changes incorporated, the new version of the Income Tax Bill will be introduced for the consideration of the House on Monday, said sources.

The government aims to implement the new Income Tax law from April 1, 2026.

The new Income Tax Bill, 2025, was introduced in Parliament on February 13, 2025, and was referred to a parliamentary panel.

According to the government, the new Bill aims to simplify language, eliminate redundancy, and streamline procedures and processes to enhance the taxpayer experience.

Once enacted, the new Bill will replace the Income Tax Act, 1961 which came into force from April 1, 1962.

The 1961 Act has been amended 65 times and more than 4,000 amendments have been made to its various provisions.

Last month, the income tax department said the new I-T Bill does not seek to change any rate of taxes.

Clarifying on reports that the new Income Tax Bill, 2025, proposes to change tax rates on long term capital gains (LTCG), the I-T department said "it (the bill) does not seek to change any rates of taxes".

Any ambiguity in this respect shall be duly addressed during the passing of the Bill, it added.