New Income Tax Act to turbocharge growth, cut litigation: Panda
He congratulated Finance Minister Nirmala Sitharaman on the passage of the modified Income Tax Bill, 2025 in the Lok Sabha.
'The leadership of Prime Minister Narendra Modi has seen the repeal and overhaul of well over 1,500 laws, helping India become the fastest growing and now the 4th-largest economy in the world,' he remarked.
The Income Tax (No 2) Bill, 2025, was passed shortly after Finance Minister Nirmala Sitharaman tabled the revised Bill, incorporating most of the recommendations made by the Parliamentary Select Committee in the Lok Sabha amid an Opposition uproar.
The revised Bill would improve fairness and clarity while aligning the law with existing provisions. The new draft aims to provide lawmakers with a single, updated version that reflects all suggested changes, the Finance Minister explained.
FM Sitharaman said that suggestions were received which are required to be incorporated to convey the correct legislative meaning. "There are corrections in the nature of drafting, alignment of phrases, consequential changes and cross-referencing," she said, adding that the earlier Bill was pulled back to avoid confusion.
The updated Income Tax Bill 2025 incorporates 285 suggestions from the Parliamentary Select Committee. The new legislation aims to simplify tax processes and address previous shortcomings, potentially reshaping the Income Tax landscape in the country.
Last week, the Income Tax Bill, 2025, which was introduced in the Lok Sabha on February 13 to replace the existing Income Tax Act, 1961, was formally withdrawn by the government.
According to Panda, who chaired the Parliamentary Select Committee responsible for reviewing the legislation, the new law, once passed, will simplify India's decades-old tax structure, cut down legal confusion, and help individual taxpayers and MSMEs avoid unnecessary litigation.
The current Income Tax Act of 1961 has undergone more than 4,000 amendments and contains over 5 lakh words. It has become too complex. The new Bill simplifies that by nearly 50 per cent -- making it far easier for ordinary taxpayers to read and understand, according to Panda. The parliamentary panel had flagged multiple drafting errors and suggested amendments to reduce ambiguity.
In the revised Bill, slabs and rates have been changed across the board to benefit all taxpayers. The new structure substantially reduces the taxes of the middle class and leaves more money in their hands, boosting household consumption, savings and investment, according to the government.
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