Lok Sabha passes new Income Tax Bill, here are key takeaways

The Lok Sabha on Monday passed the Income Tax Bill 2025 aimed at overhauling Indiarsquos 63yearold income tax framework in just three minutes and without debate reported the PTIThe swift passage occurred amid protests by opposition members over alleged irregularities in Bihars electoral roll revisionFinance Minister Nirmala Sitharaman reintroduced the bill first tabled in February and withdrawn on August 8 with substantial changes based on recommendations from a Parliamentary Select CommitteeDespite the oppositionrsquos disruptions the Bill was passed via voice vote and now heads to the Rajya Sabha and President for final approvalThe Income Tax NO2 Bill from April 1 2026 will replace the Income Tax Act 1961 The bill cuts down wordage and chapters by almost half and writes the clauses in simpler and easy to understand language It does away with the confusing concepts of assessment year and previous year replacing them with easier to understand tax yearAccording to the PTI Nangia Andersen LLP Partner Sandeep Jhunjhunwala said deductions in respect of certain intercorporate dividends for companies opting for concessional rate of taxes have been reintroduced in line with the provisions of the existing Income Tax Act 1961By enabling refunds for belated returns and harmonising definitions of Micro and Small enterprise with allied statutes the Bill reflects a balanced pragmatic and taxpayeroriented approach Jhunjhunwala saidHere are the key points of the Income Tax Bill 2025 According to the revised bill individuals will be allowed to claim TDS refund even if their return of income is filed beyond the statutory timeline provided for filing of the original incometax return as per the PTI The Income Tax No2 Bill provides for nil TCS on Liberalised Remittance Scheme LRS remittances for education purposes financed by any financial institutions The provisions relating to the carry forward and setoff of losses have been appropriately amended and the reference to the beneficial owner has been omitted to align with Section 79 of the Act With simplified terminology the bill Replaces outdated terms such as assessment year and previous year with a unified tax year for clarity It allows taxpayers to claim TDS refunds even if returns are filed after the deadline provided statutory conditions are met Enables issuing of lsquoNilrsquo TDS certificates for qualifying taxpayers Offers zero TCS Tax Collected at Source under the Liberalised Remittance Scheme LRS for educationrelated remittances funded by financial institutions Reinstates intercorporate dividend deductions for companies availing concessional tax rates Aligns definitions of Micro and Small Enterprises with the MSME Act Clarifies taxation norms for charitable trusts and nonprofit organisations ensuring anonymous donations dont affect their exemption eligibilitywith PTI inputs