New Income Tax Bill cleared by Parliament, awaits President's nod
It now awaits President Droupadi Murmu's assent. Once signed, the new law will come into effect from 1 April 2026.
The Bill is the revised version of the previously introduced Income Tax Bill 2025, which was withdrawn to address various anomalies, inconsistencies, and drafting errors. It will replace the Income Tax Act, 1961.
Speaking at the Rajya Sabha on the revised Bill, finance minister Nirmala Sitharaman said the new law, first announced in the July 2024 budget, is designed to be concise, lucid, and taxpayer-friendly, eliminating outdated provisions and simplifying compliance without altering tax rates.
She said that over the decades, the 1961 Act had become unwieldy due to multiple additions such as tax deducted at source (TDS), minimum alternate tax (MAT), transfer pricing rules, and various dispute resolution mechanisms. These made it difficult for ordinary taxpayers to navigate, and also made the law prone to multiple interpretations and avoidable litigation.
The new Bill reduces the number of sections from 819 to 536, chapters from 47 to 23, and cuts the text length by half, from over 5.1 lakh words to 2.6 lakh, Sitharaman said that for the first time, 39 tables and 40 formulae have been introduced to replace dense text, making the law easier for taxpayers to understand and navigate.
'The income tax department worked very earnestly and repeatedly went through for any overlaps or errors in the language and kept itself constantly up reviewing and correcting, reiterating and so on,' Sitharaman said.
A 31-member Parliamentary Select Committee examined the Bill in detail, holding 36 meetings, consulting stakeholders nationwide, and processing 334 memoranda. The panel made 566 recommendations, of which 370 were accepted as originally proposed by the government.
Sitharaman emphasised that no new tax rates are contained in the Bill, and rate or slab revisions will continue to be made through the annual Finance Bill.
She added that the government's standing commitment since 2019 remains not to increase the tax burden, citing the exemption for incomes up to ₹ 12 lakh a year.
The government aims to implement the law from 1 April 2026, with IT systems being updated and SOPs, FAQs, and a guidance memorandum planned to help taxpayers transition smoothly.
The finance minister also moved the Taxation Laws Amendment Bill, making four urgent changes to the 1961 Act.
These included tax exemptions for specified sovereign wealth and pension funds investing in infrastructure, abatement of block assessment cases, clarification on the ₹ 75,000 standard deduction, and harmonization of pension product deductions, noting that these provisions have also been incorporated into the new Bill.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hindustan Times
28 minutes ago
- Hindustan Times
Five dormant political parties from Gautam Budh Nagar delisted by ECI
Five political outfits from Gautam Budh Nagar have been removed from the Election Commission of India's list of registered but unrecognised political parties (RUPPs) after being found inactive for over six years and absent from their registered addresses, officials said on Tuesday. None contested any assembly or parliamentary election since 2019, and verification teams found no operational presence at their registered addresses in the district. (Sunil Ghosh/HT Archives) The delisted parties are Hindustan Krantikari Dal, Jan Kranti Samaj Party, Mother India Party, Paschim Uttar Pradesh Vikas Party, and Rashtriya Mazdoor Kisan Party. None contested any assembly or parliamentary election since 2019, and verification teams found no operational presence at their registered addresses in the district. 'Verification teams found that the five parties had neither contested any election in the past six years nor maintained their presence at the registered addresses in the district, and thus, the outfits have been struck off the Election Commission of India's list of registered but unrecognised political parties,' said Gautam Budh Nagar district magistrate and district election officer Medha Roopam. She added, 'The delisting is part of a larger clean-up of inactive political outfits across Uttar Pradesh and the country by the Election Commission to ensure only active and compliant political outfits remain on record.' The action follows a state-wide review of 345 RUPPs ordered by the Election Commission in June 2025. Officials said 334 parties in Uttar Pradesh were found in violation of mandatory provisions under the Representation of the People Act, 1951, such as failing to update office-bearers and addresses or contest elections within six years, leading to their removal. Statewide, 115 parties were delisted, including the five from Gautam Budh Nagar. No public statements surfaced from the delisted parties. Delisted parties lose benefits under the Income Tax Act, 1961, and the Election Symbols (Reservation and Allotment) Order, 1968. Aggrieved parties can appeal the decision within 30 days of the order issued on August 9, 2025. Nationally, the purge has reduced the number of RUPPs from 2,854 to 2,520. India now has six recognised national parties and 67 state parties. No public statements have surfaced from the delisted parties.
Mint
28 minutes ago
- Mint
Gensol employees face threat of double tax liability
Mumbai: Gensol Group companies deducted tax from employee salaries before going belly-up, but didn't deposit the tax deducted at source (TDS) with authorities for a year, four former executives who are aware of the matter said. That leaves about 2,200 former employees of the group in a situation where they might have to pay the taxes again, this time to the Income Tax department, as Indian law holds the employee liable for paying tax even where the employer is at fault, despite multiple court orders to the contrary. The group companies have not paid any salaries since March 2025, the former executives said on the condition of anonymity as they did not want to be publicly associated with the beleaguered group. Gensol Engineering and BluSmart Mobility went bankrupt amidst charges of promoters siphoning crores of rupees and misleading investors, and are separately undergoing corporate insolvency under the Insolvency and Bankruptcy Code, 2016. 'They have not paid TDS since April 2024. I haven't filed my tax return yet. I don't know what to do," said one of the executives who quit months before the company went down. This executive added that employees have not received their Form 16 for the previous fiscal, which puts them in a spot over filing returns even as the 15 September deadline approaches. Form 16 is a certificate of TDS provided by the employer that helps employees reconcile tax deductions, and is an essential document for filing tax returns. A second former executive who is directly aware of the company's HR practices said that Gensol habitually deposited TDS lumpsum at the end of the year rather than making monthly deposits. 'They would always pay TDS late with penalties. Anmol (promoter Anmol Singh Jaggi) said that this was the company's usual practice," this person said. 'In a meeting with CXOs in March, he said he will pay TDS by 15 April. That never happened." The second executive added that there was no employee dashboard and 'the payrolls were made by hand". Queries sent to the promoters Anmol Singh Jaggi and Puneet Singh Jaggi on Monday remained unanswered as of press time Tuesday. Meanwhile, Keshav Khaneja, Gensol Engineering's interim resolution professional, said that he does not have access to employee salaries or TDS data as everyone has left the firm. He is trying to piece together the information on pending employee dues, he said. Law vs courts Legal experts say that under the Income Tax Act, 1961, the liability lies on the employee even if the employer fails to deposit TDS with the tax department. This is despite the Delhi, Karnataka and Gujarat High Courts ruling separately that the employee was not liable. The case brings flashbacks of the infamous bankruptcy of Kingfisher Airlines from over a decade ago when thousands of employees were left without pay and their TDS was similarly not deposited with the tax department. The employees subsequently received tax notices, prompting many to move court. Eventually, the Delhi, Karnataka and Gujarat High Courts separately ruled that employees were not liable and authorities must recover the dues from the airline. More recently, several thousand employees of beleaguered edtech platform Byju's also found themselves in a similar conundrum. The Bombay High Court provided relief last September with a ruling that employees were not liable for unpaid TDS when the employer is undergoing corporate insolvency. 'Unfortunately, this relief is flowing from judicial pronouncements and not from the statute itself," said Amit Singhania, founder of Areete Law Offices. 'Therefore, again the employees may have to knock the door of the Court, to get relief from tax demand arising from non-payment of TDS." The background The Gensol Group employed about 2,200 people across its various companies including flagship Gensol Engineering, ride-sharing platform BluSmart Mobility and several other unlisted subsidiaries including Gensol Electric Vehicles, Gensol EV Leasing, and Matrix Gas and Renewables. When the company went kaput overnight earlier this year, many jumped at the first offer that came their way, the former executives said, while most hung on to the hope of a resolution and the recovery of their unpaid dues. The Securities and Exchange Board of India (Sebi) filed its interim order against Gensol Engineering Ltd and its promoters on 15 April. The regulator accused the promoters of siphoning crores of rupees from the company for personal expenses, and said that there was a complete breakdown of internal controls and corporate governance norms at the Mumbai-listed company. 'The promoters were running a listed public company as if it were a proprietary firm. The Company's funds were routed to related parties and used for unconnected expenses, as if the Company's funds were promoters' piggybank," Sebi wrote in its interim order. The diverted funds would ultimately have to be written off from the company's books, resulting in losses to the investors, Sebi said. Sebi's final order in the case is still pending.
Time of India
an hour ago
- Time of India
Five MPs urge Speaker to act against AI over flight diversion
NEW DELHI: Five MPs, including Congress's general secretary, organisation, K C Venugopal, on Tuesday wrote to Lok Sabha Speaker Om Birla over the diversion of the Thiruvananthapuram-Delhi flight they were on to Chennai and demanded action on alleged "bre-ach of privilege" by Air India. Venugopal and his party colleagues K Suresh, Adoor Prakash and Robert Bruce, along with CPI(M)'s K Radhakrishnan, also wrote to civil aviation minister Rammohan Naidu. They have demanded a time-bound investigation and asked that its findings be made public. In their letter to Birla, the five MPs said they wanted to bring to his attention the matter involving a "grave breach of privilege" by Air India, arising from events on Flight AI 2455 on August 10.
