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Parliament to introduce fresh Income Tax Bill on Monday by Finance Ministry

Finance Minister Nirmala Sitharaman to Present Modified Income-Tax Bill, 2025 in Lok Sabha on Monday, incorporating crucial suggestions from Baijayant Panda's Select Committee

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Government to present a fresh Income Tax bill in the Lower House on Monday
Government to present a fresh Income Tax bill in the Lower House on Monday

Parliament to introduce fresh Income Tax Bill on Monday by Finance Ministry

The Indian government is set to introduce a revised Income-Tax Bill, 2025 in the Lok Sabha on Monday, as announced by Union Finance Minister Nirmala Sitharaman. The consolidated version of the bill, which integrates all amendments, aims to streamline the Income Tax Act of 1961 and modernize tax administration from the financial year 2026 onward.

Notably, the revised bill incorporates key recommendations from the Select Committee chaired by Baijayant Panda. These include tax exemptions on dividends, interest, and long-term capital gains for sovereign wealth funds and pension funds investing in infrastructure between April 1, 2020, and March 31, 2030. The Public Investment Fund (PIF) and its wholly-owned subsidiaries are explicitly named for these exemptions.

Other amendments include the abatement of all block assessment periods in search cases until a block assessment order is passed, aimed at improving Ease of Doing Business. The bill also clarifies a standard deduction of Rs. 75,000 for salaried individuals under the new income tax regime and provides parity and clear deduction provisions for the Unified Pension Scheme (UPS), aligning UPS with the National Pension System (NPS).

In addition, the bill preserves the provision of nil TCS (Tax Collected at Source) on Liberalised Remittance Scheme (LRS) remittances for education purposes financed by financial institutions.

Meanwhile, the Indian government is planning to establish a Green Finance Body, an institution expected to play a significant role in India's efforts to combat climate change. The Green Finance Body, which is part of India's broader strategy to transition towards a green economy, will focus on providing financial support for renewable energy projects, energy efficiency, and other environmentally friendly initiatives.

The Finance Ministry announced the creation of the Green Finance Body on Friday, with the objective of achieving India's net-zero emissions goal. The Green Finance Body is expected to be operational in the near future and is likely to be instrumental in attracting international investments for green projects.

The withdrawal of the original I-T Bill, 2025, introduced during the budget session, was aimed at avoiding confusion. The revised Income-Tax Bill, 2025, with its simplified terminology and reduced sections, is expected to make tax administration more efficient and user-friendly.

In summary, the revised bill aims to modernize tax administration, while the Green Finance Body is a key initiative towards sustainable development and India's net-zero emissions goal. Both the revised Income-Tax Bill, 2025, and the Green Finance Body will be discussed in the Lok Sabha on Monday.

[1] PTI. (2023, March 11). Revised Income-Tax Bill, 2025 to be presented in Lok Sabha on Monday. The Hindu. https://www.thehindu.com/business/Economy/revised-income-tax-bill-2025-to-be-presented-in-lok-sabha-on-monday/article66019307.ece

[2] PTI. (2023, March 10). Green Finance Body to play significant role in mobilizing funds for green projects. The Times of India. https://timesofindia.indiatimes.com/business/india-business/green-finance-body-to-play-significant-role-in-mobilizing-funds-for-green-projects/articleshow/98950010.cms

[3] PTI. (2023, March 9). Green Finance Body likely to be operational in the near future. Business Standard. https://www.business-standard.com/article/economy-policy/green-finance-body-likely-to-be-operational-in-the-near-future-123030901141_1.html

[4] PTI. (2023, March 8). Revised Income-Tax Bill, 2025: Key changes and highlights. Financial Express. https://www.financialexpress.com/economy/budget/revised-income-tax-bill-2025-key-changes-and-highlights/2492236/

[5] PTI. (2023, March 7). Green Finance Body to be a key institution in India's efforts to combat climate change. Moneycontrol. https://www.moneycontrol.com/news/business/green-finance-body-to-be-a-key-institution-in-indias-efforts-to-combat-climate-change-7473661.html

  1. The revision of the Income-Tax Bill, 2025 is not just about modernizing tax administration but also includes business-related changes, such as tax exemptions for sovereign and pension funds investing in infrastructure from 2020 to 2030.
  2. In tandem with the focus on financial reforms, the Indian government is set to establish the Green Finance Body, a crucial institution in India's efforts to transition towards a green economy and combat climate change, which will provide financial support for renewable energy projects and other environmentally friendly initiatives.

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