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Finance Minister Nirmala Sitharaman introduced the revised Income Tax Bill in the Lok Sabha on Monday, incorporating almost all the recommendations of the Select Committee.
New Income Tax Bill: The new Income Tax Bill, which is well -known by the Lok Sabha, provides that even if no person is able to file an ITR within the due date, he will still be able to claim TDS refund. The Income Tax (No. 2) Bill, which will replace the Income Tax Act, 1961 from April 1, 2026, was introduced by Finance Minister Nirmala Sitharaman and passed in the Lok Sabha amidst an uproar without any debate. Words and chapters in the bill have been reduced to about half and the sections are written in simple and easy to understand. This assessment removes the misleading concepts of the year and the previous year, and incorporates the ‘year’ easy to understand their place. The original Income Tax Bill, 2025 which was introduced in February, was withdrawn by the Finance Minister on Friday.
All recommendations of the Select Committee include
Sitharaman introduced a revised bill on Monday, including almost all the recommendations of the Select Committee, which investigated the original bill. The Select Committee had suggested that the government should revise the provisions related to TDS claims by those who fail to file ITRs before the scheduled date. According to the amended bill, individuals will be allowed to claim TDS refunds, even if their income tax returns have been filed beyond the statutory deadline provided for filing original income tax returns. Thus the Ministry of Finance has included the provision of the current Income Tax Act, 1961. The Aayakar (No. 2) Bill provides ‘zero’ TCS on the liberalized remittance scheme (LRS) remittance for education objectives funded by any financial institutions.
Tax exemption to shareholders of pension scheme
Sandeep Jhunjhunwala, partner of Nangia Anderson LLP, said that cuts in relation to some inter-corporate dividends for companies choosing a concession rate of taxes have been resumed as per the provisions of the current Income Tax Act, 1961. Provisions related to the deficit and set-off-related provisions have been properly amended and the beneficiary owner’s context has been abandoned to align with Section 79 of the Act. Jhunjhunwala said that the definitions of micro and small enterprises have been enabled for delayed returns and the definitions of micro and small enterprises with allied laws. The aim of the new Income Tax Bill is to give tax exemption to the shareholders of the Integrated Pension Scheme. The bill presented in the Lok Sabha also includes a provision for changing the block assessment scheme regarding income tax search cases. The Taxation Law (Amendment) Bill is under efforts to amend the Income Tax Act, 1961 and the Finance Act, 2025 through the Bill, 2025.
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