The majority of the suggestions made by the Parliamentary Select Committee, which was led by BJP MP Baijayant Panda, were incorporated into the Revised Income Tax Bill 2025, which Union Finance Minister Nirmala Sitharaman introduced in the Lok Sabha on August 11, 2025.
Background of the Revised Bill
The revised bill seeks to improve fairness and clarity in the nation’s income tax system, streamline India’s tax rules, and lower litigation for people and MSMEs. In the midst of opposition clamour, the introduction was made. Sitharaman stated that the amendments were required to accurately express the legislative content when he tabulated the measure. In order to prevent confusion, the previous bill was withdrawn, she added.
Commenting on the move, Suraj Aiar, Founder & CEO, QWR said, “The revised Income Tax (No. 2) Bill, 2025 by Finance Minister Sitharaman represents a much-needed shift in India’s fiscal structure toward transparency, fairness and future-readiness. By reducing complexity including halving the number of sections and mandating faceless, digital-first assessments, the reforms showcase a modern, taxpayer-centric approach that is both timely and strategic.”
“For startups especially in the AI and XR space, these changes go beyond being just the procedural updates, instead they represent a strong foundation for ease of compliance, scalable innovation and trust. At QWr, we believe that this new bill will act as a growth enabler, empowering more entrepreneurs to focus on building, not bureaucratising,” he added.
Key Changes in the New Income Tax Law
“There are corrections in the nature of draughting, alignment of phrases, consequential changes, and cross-referencing,” she said. According to the Finance Minister, the revised draft aims to bring the law into compliance with current regulations while enhancing justice and clarity.
Now, lawmakers will have access to a single, revised version that incorporates all recommended modifications. The Parliamentary Select Committee’s 285 recommendations have been incorporated into the updated draft. It aims to rectify past inadequacies, streamline tax procedures, and possibly alter the nation’s income tax structure.
How the Bill Benefits Taxpayers and MSMEs
Panda claims that the new law will help individual taxpayers and MSMEs avoid needless litigation, simplify India’s decades-old tax system, and lessen legal ambiguity. With over 4,000 modifications and more than five lakh words, the present Income Tax Act, which was passed in 1961, is extremely complicated.
Panda pointed out that the new measure makes the legislation much easier for regular taxpayers to read and comprehend by simplifying it by almost 50%. The committee pointed out several draughting mistakes and recommended changes to clear up any confusion. Slabs and rates have all been changed in the updated law to benefit all taxpayers.
Key Changes in the New Income Tax Law
According to the administration, the new structure will significantly lower middle-class taxes, giving them more discretionary income and encouraging investment, savings, and consumption. The Income Tax Bill, 2025, which was first presented in the Lok Sabha on February 13 to replace the current Income Tax Act, 1961, was formally withdrawn by the government last week.
Why the Old Version Was Withdrawn?
The Centre had stated that it would present a modified version of the New Income Tax Bill that included recommendations from the 31-member Select Committee of the Parliament after dropping the previous version.
After abandoning the first version of the New Income Tax Bill, the Centre had promised to create a revised version that incorporated suggestions from the 31-member Select Committee of the Parliament.
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