The Income Tax Bill, 2025, which was introduced in the Lok Sabha on February 13 this year to replace the existing Income-Tax Act of 1961, has been officially withdrawn. In its place, a revised and updated version of the Bill will be presented in Parliament on August 11, incorporating over 285 key recommendations made by the Select Committee led by MP Baijayant Panda.

This decision to withdraw and reintroduce the Bill comes in order to avoid confusion arising from multiple versions of the legislation. The Select Committee had submitted its comprehensive report to Parliament on July 21. Spanning more than 4,500 pages, the report outlines detailed suggestions to simplify, clarify, and modernize India’s income tax laws.

Among the most notable recommendations are significant changes aimed at benefiting individual taxpayers. Two major changes relate to income from house property. First, the 30% standard deduction—already applicable after deducting municipal taxes—should be explicitly mentioned in the new law to remove ambiguity. Second, the committee has suggested that the deduction for home loan interest, which currently applies only to self-occupied properties, should also be extended to rented properties, providing greater relief to more taxpayers.

The committee has also addressed the widespread delays and complications in the refund process for TDS (Tax Deducted at Source) and TCS (Tax Collected at Source). It recommends making the refund system faster, more transparent, and user-friendly.

In support of these taxpayer-centric reforms, the Central Board of Direct Taxes (CBDT) has indicated that new rules are being drafted under a guiding policy called “Enforcement with Empathy,” which aims to minimize procedural burdens on honest taxpayers and ensure fair enforcement.

The revised Income Tax Bill, expected to reflect these critical improvements, will now be tabled for fresh consideration by the House on August 11.