Govt withdraws Income Tax Bill 2025, new version to be tabled on Aug 11
FM Nirmala Sitharaman says a new, updated version incorporating recommendations from the Select Committee will be introduced in the House on August 11
The Income Tax Bill, 2025, which was introduced in the Lok Sabha on February 13 as a replacement for the existing Income-Tax Act, 1961, has now been formally withdrawn.
A new and updated version of the Bill, incorporating most of the recommendations made by the Select Committee headed by Baijayant Panda will be introduced in the House on August 11.
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Income tax bill withdrawn
Finance Minister Nirmala Sitharaman withdrew the earlier Income Tax Bill, 2025, with the Select Committee having submitted its report on it.
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 in the House on August 11.
According to Panda, who chaired the Parliamentary Select Committee responsible for reviewing the legislation, the new law, once passed, will simplify India's decades-old tax structure, cut down legal confusion, and help individual taxpayers and MSMEs avoid unnecessary litigation.
The new measures are expected to play a significant role in creating a fair and equitable system of direct taxation that ensures no additional burden of direct taxes on the working and middle-class populations of the country.
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New bill to be tabled
Sharing reasons for the withdrawal in Parliament, Nirmala Sitharaman said, "Suggestions have been received which are required to be incorporated to convey the correct legislative meaning. There are corrections in the nature of drafting, alignment of phrases, consequential changes and cross-referencing."
She added that, therefore, the government has withdrawn the Income Tax Bill 2025, as reported by the Select Committee, and that a fresh Bill will be introduced in the Lok Sabha “in due course” to replace the Income Tax Act, 1961.
"The Select Committee has laid its report in the Lok Sabha on the 21st of July, 2025. Almost all of the recommendations of the Select Committee have been accepted by the Government. Suggestions have also been received from other sources which are required to be incorporated to convey the correct legislative meaning," she said.