After withdrawing the Earnings Tax Invoice on Friday, August 8, Finance Minister Nirmala Sitharaman right now (August 11) launched a brand new Invoice named The Earnings-Tax (No.2) Invoice, 2025.
A 31-member Choose Committee led by BJP MP Baijayant Panda had proposed a number of amendments to the legislation. Regardless of protests from the opposition, the Home had accepted the invoice’s withdrawal.
On July 21, the primary day of the present Monsoon session of Parliament, the report of the parliamentary panel on the brand new Earnings-Tax Invoice was introduced in Lok Sabha. In its report, the panel has prompt essential modifications to tighten definitions, take away ambiguities, and align the brand new legislation with present frameworks.
The Committee, in its 4,584-page report, had recognized a number of drafting corrections primarily based on stakeholder recommendations, which they consider are important for readability and unambiguous interpretation of the brand new invoice. The parliamentary panel had made a complete of 566 recommendations/suggestions in its report.
To present important aid to taxpayers, the committee had prompt altering the availability that disallows refunds if revenue tax returns are filed past the due date.
The brand new Earnings-Tax Invoice handed with out debate
The brand new Earnings-Tax Invoice was handed with out debate amid opposition protests over their demand for debate on Particular Intensive Revision (SIR) of electoral rolls in Bihar. Each Lok Sabha and Rajya Sabha have witnessed steady disruptions for the reason that starting of the monsoon session of Parliament over the opposition demand.
Introduction of the new Invoice
The Authorities had launched the Earnings Tax Invoice, 2025, within the Lok Sabha on February 13, 2025, and it was referred to the Choose Committee for examination.
The Choose Committee laid its report within the Lok Sabha on July 21, 2025. The brand new and amended invoice additionally incorporates recommendations from stakeholders about modifications that will convey the proposed authorized which means extra precisely.
There have been corrections within the nature of drafting, alignment of phrases, consequential modifications and cross-referencing and the federal government determined to withdraw the Earnings-tax Invoice, 2025 and convey the Earnings Tax (No. 2) Invoice, 2025.
New Invoice replaces Earnings-tax Act, 1961
The brand new invoice replaces the Earnings-tax Act, 1961, which has been subjected to quite a few amendments since its passage greater than sixty-four years in the past.
Because of these amendments, the essential construction of the Earnings-tax Act had been overburdened and language has grow to be advanced, “rising compliance for taxpayers and hampering effectivity of tax administration”.
The Objects and Causes of the invoice states that taxpayers, practitioners and tax directors had additionally raised issues in regards to the difficult provisions and construction of the Earnings-tax Act 1961.
Additionally Learn: Earnings Tax Invoice 2025: Finance Minister withdraws Earnings Tax Invoice in Lok Sabha; new model to be tabled on August 11
With inputs from businesses
