New Income Tax Bill 2025: A Look at the 10 Major Changes Suggested by the Select Committee

Based on the information you provided, here are the changes suggested by the Select Committee to the New Income Tax Bill, 2025, explained in 10 points:

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1. Simplification and Clarity: The Select Committee’s report, presented on July 21, suggested changes aimed at tightening definitions, removing ambiguities, and aligning the new law with existing frameworks to make the legislation more lucid and simplified.
2. Numerous Recommendations: After extensive deliberations, the Committee submitted 285 recommendations focused on simplifying the tax regime.
3. Drafting Corrections: The committee identified and suggested several drafting corrections based on stakeholder feedback, which they deemed essential for a clear and unambiguous interpretation of the new bill.
4. Extensive Report: The parliamentary panel’s report, which spanned 4,584 pages, contained a total of 566 suggestions and recommendations.
5. Income Tax Refund: A key change suggested is to remove the provision that denies an income tax refund if the Income Tax Return (ITR) is filed after the due date. The original bill had required timely filing to be eligible for a refund.
6. Section 80M Deduction: The committee recommended a change to allow Section 80M deduction (for inter-corporate dividends) for companies that avail the benefit of the special rate under Section 115BAA.
7. NIL TDS Certificate: The report suggested allowing taxpayers to avail a NIL TDS (Tax Deducted at Source) certificate.
8. No Change in Tax Rates: The Income Tax Department clarified that the committee did not recommend any changes to tax rates, including those for long-term capital gains (LTCG), contrary to some news reports.
9. Alignment with MSME Act: The committee recommended aligning the definition of micro and small enterprises with the existing MSME (Micro, Small and Medium Enterprises) Act.
10. Other Amendments: The report also included recommendations for clarity on several other aspects, such as advance ruling fees, TDS on provident funds, low-tax certificates, and penalty powers.