New Delhi [India], March 4 : The Select Committee of the Lok Sabha, chaired by Bharatiya Janata Party (BJP) MP Baijayant Panda, will scrutinize the Income Tax Bill 2025 on March 6 and 7.
On March 6, the committee will summon representatives from the Institute of Chartered Accountants of India (ICAI) and Ernst and Young (E&Y) to record oral evidence. On March 7, the committee will hear the views of industry bodies such as the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Confederation of Indian Industry (CII) regarding the proposed bill.
The Lok Sabha Speaker Om Birla had constituted the 31-member Select Committee of MPs to review the Income Tax Bill, which was tabled by Union Finance Minister Nirmala Sitharaman on February 13. The bill aims to replace the Income Tax Act of 1961 and introduce more modern and simplified provisions, enhancing clarity on tax matters for various categories of taxpayers, including individuals, businesses, and non-profit organisations.
Baijayant Panda, who is the National Vice President of the BJP, will lead the committee’s efforts in evaluating the proposed changes.
Among the key changes in the new bill is the use of simplified language and updated terminology. For instance, the term “tax year” will replace the existing “financial year” and “assessment year” systems. The bill also introduces new terms such as “virtual digital asset” and “electronic mode,” reflecting the growing importance of digital transactions and cryptocurrencies in the financial sector.
The scope of taxable income is clarified while maintaining the general tax principles. While the previous law taxed Indian residents on their global income, non-residents were taxed only on income earned within India. The new bill retains this rule but offers a clearer definition of deemed income, which helps provide transparency in tax rules for non-residents.
The new bill also overhauls deductions and exemptions under Sections 10 and 80C to 80U of the Income Tax Act. It consolidates these provisions and introduces new incentives aimed at promoting startups, digital businesses, and renewable energy investments.
Capital gains tax provisions have been updated as well. The bill retains the classification of capital gains into short-term and long-term categories but adds specific provisions for virtual digital assets like cryptocurrencies, ensuring they are covered within the tax framework.
For non-profit organizations, the new bill introduces a more detailed compliance framework, while also clarifying tax exemptions for charitable purposes and restricting commercial activities.
Overall, the Income Tax Bill 2025 aims to simplify and modernize India’s tax system, encouraging investments in digital sectors and startups while ensuring transparency and compliance across all taxpayer categories. The government hopes these reforms will ease tax compliance while creating a fairer tax structure for businesses and non-profits.