Income Tax Bill 2025: Key Changes and Impacts

The new Income Tax Bill 2025, passed by Lok Sabha, reintroduces tax exemptions for anonymous donations to religious-cum-charitable trusts and alters TDS claim requirements. It retains many provisions of the Income Tax Act, 1961, after recommendations from the Select Committee. The bill also affects professionals and non-profit organizations.

The Lok Sabha has approved the new Income Tax Bill 2025, which reaffirms tax exemptions for anonymous donations made to religious-cum-charitable trusts. This move corresponds to provisions found in the existing tax laws, after initial attempts to remove such exemptions stirred concern.

Changes in the bill include updated terminology to ensure professionals with receipts over Rs 50 crore can utilize prescribed electronic payment modes. It also introduces revised timelines for TDS correction statements, reducing them from six to two years—a modification aimed at mitigating deductee grievances significantly, according to the Central Board of Direct Taxes.

The bill incorporates almost all recommendations from the Select Committee, emphasizing the taxation of non-profit organizations. Additionally, it alters how the concept of 'receipts' is interpreted, shifting back to 'income,' aligning with principles from the Income-tax Act, 1961. Furthermore, individuals are offered more flexibility in TDS claim processing even if tax returns aren't filed by standard deadlines.

(With inputs from agencies.)