Income tax bill News

The Income-Tax Bill, 2025, introduced in Lok Sabha on Feb. 13 to replace the Income-Tax Act, 1961, has been formally withdrawn.

The Lok Sabha Select Committee recommended limiting deduction disallowance for late income tax returns to only Heading C of Chapter VIII, as per existing law.

One of the sources also reiterated that "this is not the standard practice." It applies only in exceptional circumstances.

Here’s a table showing a comparison of old vs new regime with the income level and deductions. If you have deductions more than Rs 7,75,000, then you can file return under old regime, explains Cleartax.  

Before the Income Tax Bill was cleared by the Cabinet, people in the know said that the legislation would likely provide directions to widen the tax net, given the contraction in the tax base following the exemption limit being raised to Rs 12 lakh in the Union Budget.

The bill, which was granted approval in the Cabinet meeting chaired by Prime Minister Narendra Modi on Friday, will be introduced in the Parliament next week before it is sent to the Parliament's Standing Committee on Finance.

Finance Minister Arun Jaitley, on Monday, tabled the Income Tax Amendment Bill in the Lok Sabha amid chaos and protests in a bid to corner the ruling BJP government on the issue of demonetisation. The IT Amendment Bill proposes proposes 30% tax on undisclosed income plus 10% penalty on the unaccounted wealth.