Baijayant Jay Panda. File
| Photo Credit: The Hindu

The select committee of the Lok Sabha, which will examine the Income-Tax Bill, 2025, was constituted on Friday (February 14, 2025) with BJP MP Baijayant Jay Panda appointed as chairman of the panel.

The committee will have 31 MPs, including 17 from the ruling National Democratic Alliance. The NDA MPs consist of 14 from the BJP and one each from the TDP, JD(U), and the Shiv Sena.

The Opposition parties have 13 MPs, including six from the Congress, two from the Samajwadi Party and one each from the DMK, the TMC, the Shiv Sena (UBT), the NCP (SP) and the RSP. One MP, Richard Vanlalhmangaiha, is from the Mizoram’s ruling Zoram People’s Movement.

Besides Panda, the BJP’s members include Nishikant Dubey, P.P. Chaudhary, Bhartruhari Mahtab and Anil Baluni.

Opposition MPs include Deepender Singh Hooda of the Congress, Mahua Moitra of the Trinamool Congress, Supriya Sule of the NCP (SP) and N.K. Premachandran of the RSP.

The panel is mandated to submit its report by the first day of the Monsoon session. The ongoing Budget Session will conclude on April 4 and the Monsoon session may commence in the third week of July.

While introducing the Bill in Lok Sabha on Thursday, Finance Minister Nirmala Sitharaman urged Speaker Om Birla Birla to refer the draft law to a select committee of the House.

The much-anticipated Bill will replace terminologies such as “assessment year” and “previous year” with the easier-to-understand “tax year” as part of a move to simplify language while removing provisos and explanations.

The ongoing Budget Session will conclude on April 4

Union Finance Minister Nirmala Sitharaman, Reserve Bank of India Governor Sanjay Malhotra and Directors during the 613th Meeting of Central Board of Directors (CBD) of the RBI in New Delhi on February 8, 2025.
| Photo Credit: PTI

Finance Minister Nirmala Sitharaman on Saturday (February 8, 2025) said she is likely to introduce the new income tax bill, which will replace the six-decade-old I-T Act, in the Lok Sabha in the coming week.

After introduction in the Upper House, the bill will be sent to a parliamentary standing committee for scrutiny.

Also read: Union Budget 2025 highlights

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the bill on Friday (February 7, 2025).

“Yesterday, the Cabinet cleared the New Income Tax proposal, I hope to have it introduced in the Lok Sabha in the coming week. Post that it will go to a committee,” Ms. Sitharaman said a media briefing after addressing the post-Budget customary meeting with the central board of directors of the Reserve Bank of India (RBI).

The bill will again go to the Cabinet after the parliamentary committee gives its recommendations on it. After Cabinet approval, it will again be introduced in Parliament.

“I still have three critical stages to pass through,” Ms. Sitharaman said to the query regarding rollout of the new income tax law.

Ms. Sitharaman had first announced a comprehensive review of the Income-Tax Act, 1961 in the July 2024 Budget.

The CBDT had set up an internal committee to oversee the review and make the Act concise, clear, and easy to understand, which will reduce disputes, litigations, and provide greater tax certainty to taxpayers.

Also, 22 specialised sub-committees have been established to review the various aspects of the Income Tax Act.

To another question, the Finance Minister said the last week’s Budget announcement on customs duty rationalisation is a work that has been on since the last two years.

“So we had rationalised some even two years ago. We also set certain norms saying evergreening is not going to happen on anti-dumping duties, which had played a big role in giving some kind of a protection for India’s own manufacturing capabilities,” she said.

Ms. Sitharaman further said with every such expiry date getting closer, the government will review it thoroughly, and only in exceptional cases duties will be extended, but most often they should be concluded so that the protection does not become a perpetual protection.

“So, this is an ongoing process. We want to make India a lot more investor-friendly, trade friendly, and at the same time, balance it with Aatmanibhar Bharat where we need to have production, particularly through the MSMEs. We will provide the tariff protection as required by the industry,” the Finance Minister, who presented her eighth straight Budget on February 1, said.

In her Budget speech, Ms. Sitharaman had announced rationalisation of customs tariff structure for industrial goods.

As part of comprehensive review of customs rate structure announced in July 2024 Budget, on February 1, 2025 she proposed to remove seven tariff rates.

This was over and above the seven tariff rates removed in the 2023-24 Budget. There will be now only eight remaining tariff rates, including ‘zero’ rate.

Finance Minister Nirmala Sitharaman had announced in Budget 2025 that the new tax bill will be introduced in the ongoing session of Parliament.
| Photo Credit: Getty Images/iStockphoto

The Union Cabinet on Friday (February 7, 2025) approved the new income tax bill, which will replace the six decades old I-T Act, sources said.

The new bill seeks to make direct tax law simple to understand and not to impose any new tax burden. It will not have provisos and explanations or long sentences.

The Cabinet, chaired by Prime Minister Narendra Modi, approved the New Income Tax Bill, sources said.

Sources said the new income tax bill will now be introduced in the Parliament next week and would be sent to Parliament’s Standing Committee on Finance.

The first leg of the ongoing budget session ends on February 13, 2025. The session will reconvene on March 10 and sit through April 4.

Finance Minister Nirmala Sitharaman had announced in Budget 2025-26 that the new tax bill will be introduced in the ongoing session of Parliament.

Ms. Sitharaman had first announced a comprehensive review of the Income-Tax Act, 1961 in July 2024 Budget.

The CBDT had set up an internal committee to oversee the review and make the Act concise, clear, and easy to understand, which will reduce disputes, litigations, and provide greater tax certainty to taxpayers. Also, 22 specialised sub-committees have been established to review the various aspects of the Income Tax Act.

Public inputs and suggestions were invited in four categories — simplification of language, litigation reduction, compliance reduction, and redundant/obsolete provisions.

The income tax department has received 6,500 suggestions from stakeholders on review of the Income Tax Act.

Govt. proposes nil tax on income up to ₹12 lakh per annum under New Tax Regime, Finance Minister Nirmala Sitharaman said in her Union Budget 2025 speech in the Parliament, in New Delhi on February 1. 2025.. (Representational image)

In the most anticipated announcement this Union Budget 2025, Finance Minister Nirmala Sitharaman announced there would be no income tax for incomes up to ₹12 lakhs. She termed it as commitment and trust on the middle class. Effectively, under the new tax regime considering the erstwhile standard deduction of ₹75,000, income of up to ₹12.75 would have no income tax liability.  

Also read: Union Budget 2025 updates

“I am now happy to announce that there will be no income tax payable up to income of ₹12 lakh [i.e. average income of ₹1 lakh per month other than special rate income such as capital gains] under the new regime,” the Finance Minister said.

The move comes in after prevalent consensus in the industry and populace at large about increasing aggregate consumption in the economy. “The new tax structure will substantially reduce the taxes of middle-class and leave more money in the hands of the middle class and boost consumption.”  

Enumerating revisions in tax slabs, the Finance Minister informed that incomes up to ₹4 lakhs would not be taxed, ₹4 to 8 lakhs would host 5% taxation rate, ₹12-16 lakh 10%, ₹12-16 lakh 15%, ₹16-20 lakh 20%, ₹20-24 lakh 25% and incomes above ₹24 lakh 30%.  

Also read: Nirmala Sitharaman’s full speech

A tax payer in the new regime with an income of ₹12 lakh will get a benefit of ₹80,000 in tax; a person having income of ₹18 lakh will get a benefit of ₹70,000 in tax; a person with an income of ₹25 lakh gets a benefit of ₹1.10 lakh, Ms. Sitharaman added.

The Rajya Sabha MP presented her eighth consecutive Budget on Saturday (February 1, 2025) — taking her closer to the record ten budgets presented by former Prime Minister Morarji Desai during his lifetime.