Good news for all EPFO pensioners! govt, private employees to get benefit as per new Income Tax Bill 2025 of…
A commuted pension means receiving a one-time lump sum in place of monthly pension installments. For example, if a pensioner wants to receive the next 10 years of pension in one payment, it is called a commuted pension. This gives the retiree immediate access to a large amount, which can be used for personal needs or investments. Who Is Eligible In A New Scheme?
Under the new provisions: All government employees, including defence personnel and employees of public sector undertakings are eligible.
Private sector employees whose employers do not operate a pension scheme but who have themselves contributed to an approved pension fund. What Has Changed Now?
Under the existing income tax law, the lump-sum (commuted) pension received by government employees was completely tax-free, while for non-government pensioners, the amount was fully taxable. The Lok Sabha's Select Committee called this a discriminatory tax policy and recommended reforms. The 2025 Bill will now remove this disparity and have granted equal tax exemption to all eligible pensioners.
Many people in the country voluntarily invest in recognised pension schemes but if they are not government employees, they do not get tax exemption. This amendment will not only reduce the tax burden but also encourage more people to invest in pension funds for retirement planning.
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The Hindu
2 hours ago
- The Hindu
Is the new Income Tax law more accessible?
The story so far: The Income Tax Bill 2025, which seeks to replace the Income Tax Act of 1961, was passed by Parliament in the ongoing monsoon session. The Bill is significantly shorter, more concise, and has clearer legislation. However, it also incorporates some new elements that could be problematic. Why was a new law needed? The Income Tax Act, 1961 is outdated, and over the years has been amended numerous times, leading to income tax legislation in India being convoluted and difficult for an average citizen to understand. It also provided tax officials ample scope for harassment due to the discretion the law afforded them. In the new Bill, the number of chapters has been brought down to 23 from 47 in the Income Tax Act, 1961, and the number of Sections to 536 from 819. Moreover, in order to provide greater clarity, the new Bill has increased the number of tables to 57 from 18 and the number of formulae to 46 from six. Most importantly, the language has been greatly simplified. Jargon has been removed as much as possible, and examples have been provided where needed. Why was a second version of the Bill needed? The original version of the Income Tax Bill 2025 was introduced in Parliament in February this year. However, given the importance of the legislation and the ambitious nature of what it was trying to do, it was decided to refer it to a Select Committee. The committee was headed by Baijayant Panda and comprised Members of Parliament from across political parties. The Select Committee submitted its report in July this year. It was a mammoth report, and while it retained much of the language in the new Bill, it also recommended several changes. On August 8, 2025, the government withdrew the Bill to incorporate the suggestions made by the committee. The reason for the withdrawal was to avoid confusion through multiple versions of the Bill and to provide a clear and updated version with all the changes incorporated. That new version was introduced in the Lok Sabha on August 11, 2025 and was passed the same day without debate. What has changed in the new Bill? Finance Minister Nirmala Sitharaman was clear from the outset that the purpose of the new legislation was to simplify and rationalise the existing law, not to change the rates or slabs through it. Those changes are made periodically by the government, such as in Budget 2025, when the income tax slabs and rates were substantially changed. Most of the changes will not impact the average income tax payer, and are more technical in nature. For example, the provisions of Minimum Alternate Tax (MAT) and Alternate Minimum Tax (AMT) have been separated into two sub-sections. However, the new law has codified some taxpayer-friendly features. For example, taxpayers can now update their income tax returns up to four years from the end of the relevant assessment year. This means mistakes can be rectified without any penalty or tax incidence. Notably, the period for which assessments could be reopened has been reduced to five years. Are all the changes positive? No. The provisions relating to searches by income tax officials have been tweaked to include some concerning features. The original Income Tax Act 1961 required anybody found to be in control or possession of any documents in electronic form to provide the authorised officer 'the necessary facility to inspect such books of account or other documents'. It also authorised the tax official to 'break open the lock of any door, box, locker, safe, almirah or other receptacle' in case their keys were not available. The new law takes these concepts a step further. It now says that anybody in possession or control of electronic documents or information must not only provide the tax officer 'reasonable technical and other assistance', but also share passwords. As the law sets no limits on what electronic information the tax officer may need to assess, this means the assessee must also share passwords of social media and personal emails, if required. Further, the law also empowers the tax official to 'override the access code to any computer system' if the password is not provided. What is the justification? While a few members of the committee called for the dilution of these sections in their dissent notes, the Select Committee as a whole accepted the government's argument that a lot of relevant financial information is shared over messaging services or stored in personal emails, and so recommended that these sections be included.
Time of India
5 hours ago
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Rahul Gandhi to launch 'Vote Adhikar Yatra' in Bihar from Aug 17, to cover more than 20 district in 16 days
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Mint
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Jan Vishwas 2.0: Centre set to table decriminalisation bill in Lok Sabha. Here are five things to look out for
The central government is set to table the Jan Vishwas 2.0 bill in front of the Lok Sabha on Monday, 18 August 2025, as the nation is looking to amend several laws and bring in the new concept of decriminalisation by introducing an 'improvement notice' instead of a penalty for an offence, reported the news portal Indian Express on Saturday, 16 August 2025. Earlier this week, the Union Cabinet of India cleared the Jan Vishwas 2.0 bill which is aiming to decriminalise and rationalise the punishment of offences based on a trust basis governance for the ease of doing business. 'In our country, there are such laws that can put people in jail for very small things — you would be shocked. No one has really paid attention to them. I have been pursuing this, because these unnecessary laws that put our country's citizens behind bars should be abolished. We had introduced a Bill in Parliament earlier, and we have brought it again this time,' said Prime Minister Narendra Modi in his 79th Independence Day speech. 1. Improvement notice — In the Jan Vishwas 2.0 bill, the centre has proposed to introduce a concept of an 'improvement notice' instead of a penalty for a first time offender. In the Budget 2025 announcement, Union Finance Minister Nirmala Sitharaman announced that the government will bring the Jan Vishwas 2.0 this year, though which the Centre aims to decriminalise more than 180 legal provisions. "In the Jan Vishwas Act 2023, more than 180 legal provisions were decriminalised. Our government will now bring up the Jan Vishwas Bill 2.0 to decriminalise more than 100 provisions in various laws," said Sitharaman in the Budget speech. 2. Shift of approach — The proposed bill bring forth a shift of approach of the central government moving from a 'penalise on first detection' approach of the Jan Vishwas 1.0 which was imposed as a law in 2023, into a 'inform–correct–penalise' approach soon to be mandated as the law. Through this move, the government aims to promote the ease of doing business and trust-based regulation while maintaining deterrence for repeated violations, a person aware of the development told the news portal. 3. No penalty on first offence — According to the proposed bill, the first time offenders will not be charged any penalty for their offence and will be served an opportunity to rectify their non-compliance withing a pre-set period. 4. Increasing subsequent fines — In case an entity becomes a repeat offender, the penalties will start to be applicable from the second offence onwards. According to the news portal's report, the penalty which will be applicable will be the same as it was for the first offence in Jan Vishwas 1.0. The proposal also mandates that the fines charged will increase for the subsequent offences subject to a maximum cap depending on the sections. 5. Changes via Jan Vishwas 1.0 — According to the Jan Vishwas Act of 2023, in efforts to decriminalise several offences under various laws, the Indian government removed the Section 41 of the Food Corporations Act, 1964 which punished imprisonment for a term which may extend to six months, or a fine of ₹ 1,000, or both in case of a using FCI's name in any prospectus or advertisement without its consent in writing. Another case was when the Jan Vishwas Act removed the 6-month imprisonment penalty for tree felling or damage caused by cattle in protected forests; they have however, kept ₹ 500 as a fine for the same in efforts to decriminalise.
