In a significant development for corporate India, the government is planning to present the new Income Tax Bill 2025 during the upcoming Monsoon Session of Parliament. This move aims to address the issue of double taxation and includes the restoration of Section 80M, which allows companies to claim deductions on inter-corporate dividends. A parliamentary panel, which has unanimously approved over 285 suggestions on the draft bill, is driving this process.
Overview of the New Income Tax Bill
The draft Bill was initially introduced in the Budget Session and is presently under review by a select parliamentary committee led by Member of Parliament Baijayant Panda.
The panel has put forward more than 285 changes to the draft law, with the majority likely to be seriously considered. Suggestions made by a reliable source indicate that several amendments are under active review.
Key Recommendations and Changes
One notable proposal is the inclusion of the phrase “for the purpose of employment” to provide a clear definition of residency status for Indian expatriates. Additionally, the panel recommends the reintroduction of provisions for nil withholding tax certificates, offering relief to taxpayers on specific payments.
Despite extensive debates during the committee’s 36 sittings, Section 247(1) concerning search and seizure powers remains unchanged. The report highlights concerns regarding the faceless assessment system and the complexity of tax deducted at source (TDS) regulations.
Modernizing India’s Tax System
The new bill is designed to update and simplify India’s tax laws, which have seen minimal changes over the past six decades. It introduces presumptive taxation for non-residents, revises rules related to business income, enhances anti-avoidance measures, and streamlines compliance processes.
Thanks to the active addressing of industry concerns and the approval of most recommendations, the revised legislation is expected to smoothly progress through the session commencing on July 21.
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