As the revised Income Tax Bill 2025 prepares to take center stage in the Lok Sabha on August 11, 2025, the nation watches closely. This landmark legislation promises to transform India’s tax landscape by simplifying the code, enhancing taxpayer benefits, and offering fresh incentives to businesses for strengthening the country’s economic future.

This is cited as a significant landmark move by the government that aims to replace the decades-old Income Tax Act of 1961 by consolidating over 4,000 amendments into 536 sections and 16 schedules. By incorporating 285 Select Committee recommendations, the bill uses clearer language to simplify the tax code and reduce complexity for taxpayers and professionals. strengthening the country’s economic future.

What the Revised Bill Brings: Key Highlights

1. Simplified Tax Structure
   The bill removes ambiguous provisions to reduce litigation and improve compliance by making the tax code clearer and more organized.
    
2. Enhanced Taxpayer Benefits
    
   • Rebate threshold under Section 87A raised from ₹7 lakh to ₹12 lakh.
      
   • Maximum rebate increased from ₹25,000 to ₹60,000.
      
   • Introduction of a standard deduction of ₹75,000, effectively making income up to ₹12.75 lakh tax-free for salaried individuals. Allow taxpayers to avail NIL TDS certificate.
      
3. Refund Flexibility
   Taxpayers can claim refunds even if returns are filed after the due date, provided other conditions are met, resolving a long-standing refund issue.
    
4. Property Taxation
   Proposed higher taxes on vacant properties have been dropped, maintaining current tax treatment and easing the burden on property owners.
    
5. Taxpayer-Friendly Compliance Measures
   Genuine mistakes will no longer attract penalties, encouraging voluntary compliance. The bill also emphasizes straightforward language for better understanding of tax obligations.
    
6. Restoration of Section 80M Deduction
   Deductions on inter-corporate dividends are reinstated, benefiting companies enjoying concessional tax rates.
    
7. Introduction of ‘Tax Year’ Concept
   The bill replaces “Previous Year” and “Assessment Year” with a single, simplified term — “Tax Year.”
    
8. Strengthened Digital Administration
   The Central Board of Direct Taxes (CBDT) gains expanded rule-making powers to promote efficient, technology-driven tax administration.
    

The revised Income Tax Bill 2025 underscores the government’s commitment to creating a more transparent, efficient, and taxpayer-friendly system. This is expected to take effect from the next financial year and it promises to ease compliance and provide greater benefits for individuals and businesses across India.