India’s tax laws are fully based on the Income Tax Act of 1961 and these laws are overly complex even after the amendments. On 11th August 2025, the Finance Minister introduced a refreshed version called Income Tax (No. 2) Bill, 2025 after withdrawing the earlier draft on 8th August 2025. This New Income Tax Bill Amendment 2025 closely follows the recommendations from a Parliamentary Select Committee. This committee aims at making the law simple and modern.
New Income Tax Bill Amendment 2025
The New Income Tax Bill Amendment 2025 integrates over 285 recommendations from a parliamentary select committee and stakeholder’s feedback. The new bill includes a number of sections from 819 to 536 into 23 chapters. This second version was passed in Lok Sabha via voice vote without debate on 11th Aug, 2025. Now this bill is set to go to the Rajya Sabha and then for the presidential assent to become law.
New Income Tax (No.2) Bill 2025 – Quick Facts
| Post Title | New Income Tax Bill Amendment 2025 |
| Year | 2025 |
| Country Name | India |
| Bill Name | The Income Tax (No.2) Bill, 2025 |
| Legal Size & Structure | Sections cut from 819 to 536 |
| Introduced By | FM Nirmala Sitaraman |
| Bill Number | 104 of 2025 |
| Total Chapters | 23 Chapters |
| Original Draft Date | 13th Feb, 2025 |
| Original Draft Paused | 8th Aug, 2025 |
| Revised Bill Introduced | Reintroduced + Passed in Lok Sabha on 11th Aug, 2025 |
| Current Status | Pending in Rajya Sabha, Presidential assent |
| Main Goal | To Simplify and modernize the 1961 Income tax act |
| Key Changes | New Tax Year term, fairer pension, property rules changes and more |
| Category of the Post | News |
| Official CBDT Web Portal | www.incometaxindia.gov.in |
Income Taxation Laws Bill Main Goal 2025
The main goal of the New Income Tax Bill was originally introduced as SIMPLE. This new bill aims to make tax laws easier to understand and follow for everyone like individuals, businesses and tax authorities.
S.I.M.P.L.E stands for:
| S | Streamlined Structure & Language |
| I | Integrated and Concise |
| M | Minimized Litigation |
| P | Practical and Transparent |
| L | Learn and Adapt |
| E | Efficient Tax Reforms |
Now, the second version of this new bill also brings the clear definitions for terms such as Capital assets, Micro and small enterprises, Beneficial owner.
Key Changes In Income Tax Bill No. 2
Check out what’s included in revised draft of the New Income Tax Bill:
- Refunds without delay penalties: People can get tax refunds even if they file their returns late.
- No Fines for late TDS: If tax deducted at source is filed late then there will be no financial penalty.
- Nil TDS Certificate: Those with no tax liability can apply in advance for nil TDS Certificate and this is available for both residents and non residents.
- Clearer Pension Deductions: Lump sum pension withdrawals from specific funds like LIC pension fund will get explicit tax deduction benefits.
- Property Tax Rules Simplified: Income from House property will have a 30% standard deduction and interest paid on loans for buying or improving property can be deducted.
- Restored Dividend Deduction: Companies can again deduct inter corporate dividends to prevent double taxation which was missing in the first draft.
- MSME Definition Aligned: Micro means investment under Rs. 1 crore and turnover below Rs. 5 crore. Small means investments under Rs. 10 crore and turnover below Rs. 50 crore.
What’s Else In the Income Tax Bill, 2025?
The Income Tax Bill 2025 includes:
- New concept of Tax Year
- Provisions and tables for TDS
- New Clarity on presumptive taxation
- Adjustments for deduction of bad debts.
What Remains Unchanged In Income Tax Bill Version 2.0?
- Existing tax slabs remain unchanged.
- Any other provisions mentioned in earlier drafts do not change.
Important Links – The Income Tax No.2 Bill 2025
| Official CBDT Web Portal | www.incometaxindia.gov.in |
| The Income Tax (No.2) Bill 2025 – Official Direct PDF Link | Link Here |
| Official Update on Income Tax Bill 2.0 | Link Here. |
FAQs Related To New Income Tax Bill Amendment 2025
- What’s the New Income Taxation Laws Amendment 2025?
- It is an updated draft of the earlier SIMPLE bill with new rules, revised definitions and other provisions updates.
- When was the Revised Income Tax Bill 2025 draft released?
- The new draft was submitted on 11th Aug, 2025 and this replaces the earlier version which was introduced on 13th Feb, 2025.
- What has not been changed in the New Income Tax Bill No.02 Amendment 2025?
- The other provisions and existing income tax slabs remain the same as in the Income Tax Bill, 2025.
- Where can users know more info on Income Tax 2.0 Bill, 2025?
- Users can see the Income Tax 2.0 Bill, 2025 on official CBDT web portal i.e. incometaxindia.gov.in or users can check out Sansad web portal.