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New Indian Express
a day ago
- Business
- New Indian Express
I-T Bill 2025: Relief for corporates on dividend taxation, LLP AMT burden
The New Income Tax Bill, 2025, has introduced significant amendments in corporate taxation, aimed at simplifying compliance and providing greater certainty to businesses. A key concern of double taxation on dividend income has been addressed, alongside clarifications on the Alternate Minimum Tax (AMT) for LLPs, inter-corporate dividend deductions, and the concept of 'beneficial ownership'. 'By removing the restrictive clause that would have denied refunds for belatedly filed returns and refining provisions akin to Section 79 by omitting the 'beneficial owner' reference, the Bill reduces potential litigation and enhances clarity. The restoration of inter-corporate dividend deductions for companies opting for concessional tax rates further strengthens the framework,' said Abhinav Sogani, VP & Global Tax Head, Tata Consumer Products. The draft Bill had initially appeared to withdraw deductions for inter-corporate dividends for companies under the concessional 22% tax rate, raising fears of cascading taxation in multi-tier structures. 'The final Bill corrects this by allowing such companies to claim deductions on dividends received from domestic companies, foreign companies, or business trusts—provided the dividends are onward distributed. This is critical in preventing double or even triple taxation of the same income and supports efficient capital flows,' noted Aditi Goyal, Partner, Tax Practice, Trilegal. For the FMCG industry, Sogani said, the reforms bring simplicity and legal certainty, enabling faster growth and reaffirming the government's commitment to a transparent, business-friendly environment. On LLPs, the clarification has been welcomed by industry. The draft Bill tabled in February had suggested that AMT at 18.5% would apply to all LLPs, even those not availing any tax holidays or deductions. This would have effectively nullified the concessional 12.5% rate on long-term capital gains and weakened LLPs as an investment vehicle. The revised Bill confirms that only LLPs availing specified deductions will be subject to AMT, restoring parity with the current framework under the Income Tax Act, 1961. The Bill also resolves ambiguities around shareholding continuity under clause 119, which governs carry-forward and set-off of losses. The draft's use of the phrase 'shall continue to be the beneficial owner' had raised concerns about uninterrupted 51% shareholding between the loss year and set-off year. According to Goyal, the final Bill clarifies this by prescribing a point-to-point comparison between two dates and by reverting to the established phrase 'beneficially held,' thereby avoiding any unnecessary look-through to ultimate individual shareholders.
India Today
11-08-2025
- Business
- India Today
New Income Tax Bill approved: What's new after withdrawal of earlier draft
The Lok Sabha has passed a revised version of the Income Tax Bill, 2025, just a week after the earlier draft was withdrawn. The updated Bill, presented by Finance Minister Nirmala Sitharaman on August 11, incorporates most of the recommendations made by the Select Committee and aims to replace the six-decade-old Income Tax Act, THE EARLIER BILL WAS WITHDRAWNThe first draft of the Income Tax Bill was introduced in February this year as part of the most significant reform to India's direct tax code in more than sixty years. However, the government decided to pull it back last week to make certain corrections and the move in Parliament, Sitharaman said the changes included refining the language, aligning phrases, making consequential changes, and improving cross-referencing. She pointed out that the revised draft was intended to give lawmakers a single, clear version to work with and to prevent any CHANGE REGARDING COMMUTED PENSIONOne of the key updates in the revised Bill is an explicit tax deduction for commuted pension, lump sum pension payments, for certain taxpayers. This applies to those receiving pensions from specific funds listed in Schedule VII of the Bill, such as the LIC Pension the earlier draft, this exemption was not clearly stated, which led the Select Committee to recommend its inclusion. The Committee noted that the change was needed to ensure fair tax treatment for non-employees receiving pensions from approved funds, similar to the relief already given to employees. According to Dinesh Kanabar, CEO, Dhruva Advisors, "While we study the provisions of the amended Bill, we see some very welcome changes. There were a number of provisions against which representations were made to select committee. These have now been accepted in the Bill presented today."He added, "To give a few examples, the provisions of levying Alternate Minimum Tax on LLPs has been done away with, the rigours placed on Charitable Trust have been removed, the provisions of Transfer Pricing and the definition of Associated Enterprise to whom these provisions apply, have been relaxed."Kanabar further noted that, regarding charitable trusts, the new Bill proposes to restore the capital gains tax reinvestment benefit and the option to utilise funds in the following year. For individuals, the clarifications on claiming standard deduction for income from house property after municipal tax payment, as well as the deduction of pre-construction interest on let-out properties, are positive FEATURES OF THE WITHDRAWN DRAFTThe February draft sought to simplify India's tax law by using clearer language, consolidating deductions, and shortening provisions. It also proposed lower penalties for some offences, a 'trust first, scrutinise later' approach to reduce disputes, and modernised tax administration through greater digital monitoring and stronger CBDT these changes, the earlier version did not alter tax slabs, capital gains rules, or income categories. It kept the same residency criteria and financial year timelines while streamlining TDS rules and simplifying depreciation the revised Bill now approved by the Lok Sabha, the legislation takes a major step towards replacing the 1961 Act, potentially reshaping India's income tax system for decades to come.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- EndsMust Watch
News18
29-07-2025
- Business
- News18
Income Tax Bill: Is 18.5% LTCG Tax Rates Proposed On LLPs Under New Draft Bill?
The Income Tax department denied claims of increased long-term capital gains tax on LLPs in the new Income Tax Bill, 2025 The Income Tax department on Tuesday categorically refuted the claims of a possible increase in the long-term capital gains (LTCG) tax on Limited Liability Partnerships (LLPs) in the new Income Tax Bill, 2025. The Income Tax Department in a post on X has clarified that the new Bill, which is currently under parliamentary scrutiny, does not include any change in tax rates. 'There are news articles circulating on various media platforms that the new Income Tax Bill, 2025 proposes to change tax rates on LTCG for certain categories of taxpayers. It is clarified that the Income Tax Bill, 2025 aims at language simplification and removal of redundant/obsolete provisions. It does not seek to change any rates of taxes," the I-T Department said in a post on X. — Income Tax India (@IncomeTaxIndia) July 29, 2025 'Any ambiguity in this respect shall be duly addressed during the passing of the Bill," it added. Rumours were circulating on social media the draft Bill's provisions on Alternate Minimum Tax (AMT) could effectively raise the LTCG tax on LLPs from 12.5% to 18.5%. Several tax practitioners have voiced concerns that the way AMT provisions have been redrafted may result in higher effective tax liability for LLPs currently benefiting from lower LTCG rates. Capital gains tax refers to the tax applicable on the profit one makes by selling an asset. These assets could be stocks, bonds, or real estate. The tax amount is based on the period for which one holds the asset before its sale. If an asset is held for more than a year, the profit is considered a long-term capital gain and is taxed. view comments Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
