Latest news with #Income-TaxBill
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Business Standard
a day ago
- Business
- Business Standard
Govt seeks to revamp entire tax system with GST reform, Income-Tax Bill
The Centre has proposed a two-tier GST with 5 per cent and 18 per cent slabs, along with a 40 per cent slab for a few items in the sin goods category premium Asit Ranjan Mishra Monika Yadav New Delhi Listen to This Article The central government's proposal for a structural overhaul of the goods and services tax (GST), along with the Income-Tax Bill recently passed by Parliament, will lead to a complete revamp of both the direct and indirect tax system in the country, said a senior government official. 'This is a complete revamp of the direct and indirect tax system. It will take the GST Council at least two meetings to go through all the item-wise changes in slabs. The inclusion of petrol and diesel under GST has been deferred for the time being in view of the prevailing energy sector uncertainties.
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Business Standard
6 days ago
- Business
- Business Standard
Finmin clears the air: Advance tax penal interest stays at 3%, no increase
In a welcome relief for taxpayers, the Finance Ministry on Tuesday issued a corrigendum to correct a drafting error in the newly introduced Income Tax Bill, 2025. The amendment clarifies that penal interest on shortfalls in advance tax payments remains unchanged at 3% per quarter (1% per month for three months). Previous confusion had sparked concern that the interest rate was increased to 3% per month. Taxpayers with an annual tax liability of ₹10,000 or more must pay advance tax in four instalments — on June 15, September 15, December 15, and March 15. Senior citizens without business income are generally exempt from this rule. The corrigendum matters for those who miss these deadlines or pay less than the required instalment, as the resulting interest charges can quickly become substantial. What the Drafting Error Said The draft clause (Clause 425) in the newly tabled Income Tax Bill incorrectly specified interest of 1% per month or part of a month on the shortfall in advance tax payments. Though seemingly benign, this change implied a maximum monthly interest of 1% for every month delayed, prompting concerns the rate might effectively rise to 3% monthly. What the Corrigendum Fixes The updated wording restores the original intent under Section 234C of the Income Tax Act, 1961: 3% per instalment (charged once for up to three months) when the taxpayer misses deadlines on June 15, September 15, or December 15 instalments. 1% interest applies only to the March 15 instalment. 'Interest is charged for a minimum of three months even if there is a delay of a single day beyond the due date,' as per Sandeep Jhunjhunwala, Partner, Nangia Andersen LLP. Why It Matters for Taxpayers No increased burden: The corrigendum ensures the tax regime remains exactly as it was—1% interest for each delayed instalment, translating to a 3% penalty for quarterly defaulters, not a punitive 3% monthly charge. Maintained clarity: The simplified tabular presentation clarifies the structure, reducing calculation errors or misinterpretations. Calculation in Practice If you owe ₹5 lakh in advance tax: By June 15, ₹75,000 is due. If you pay only ₹50,000, there's a shortfall of ₹25,000. You owe ₹750 interest (₹25,000 × 1% × 3 months). If by September 15 you've paid ₹1.70 lakh (short ₹55,000), interest is ₹1,650 for the next quarter. Total due: ₹2,400 in interest—exactly what the old law required. Bottom Line for You No change in the financial impact of missing deadlines—just better clarity in the law's wording. If you pay advance tax a day late, you're liable for the full 3% penalty per instalment, not a cumulative monthly charge. The correction reduces uncertainty, ensuring taxpayers avoid unintended overpayments and calculation errors. Lok Sabha passes revised new I-T Bill 2025 The Lok Sabha, on August 11, passed the modified new Income-Tax Bill, 2025 and the Taxation Laws (Amendment) Bill, 2025, shortly after Finance Minister Nirmala Sitharaman tabled the revised version in Parliament. Now, the Bill must be passed by the Rajya Sabha to replace the current Act, and then it will seek the President's nod. Once enacted, the new I-T Bill will replace the archaic six-decade-old income tax law. "The biggest advantage of the new law is that a common man may easily understand it with lesser efforts as compared to the old law. The revised bill has incorporated most of the changes recommended by the Select Committee. The new regime announced in Budget 2025 will remain in the new Bill and the tax-payers still have to undergo the process of assessing the right regime to follow while filing tax return. Similarly, no changes are proposed in tax rates as introduced in Budget 2025," said Preeti Sharma, Partner, Global Employer Services, Tax & Regulatory Services, BDO India
Hindustan Times
7 days ago
- Politics
- Hindustan Times
Rajya Sabha adjourned till 2 pm as Opposition presses for discussion on SIR
New Delhi, Rajya Sabha proceedings on Tuesday were adjourned till the post-lunch session within minutes of its assembly, as Opposition MPs insisted on a discussion be taken up on the alleged irregularities in the Special Intensive Revision of electoral rolls in Bihar. Rajya Sabha adjourned till 2 pm as Opposition presses for discussion on SIR Soon after listed official papers were laid on the table of the House, Deputy Chairman Harivansh said he has rejected all 21 notices that invoked Rule 267, which allows suspension of listed business to discuss matters being raised in them. Without indicating the subject, he said the notices were received on four different subjects but none of them contained a motion drawn in a proper manner. As many as 11 notices sought discussion on a matter which is sub judice, he said. The Supreme Court is hearing petitions filed against SIR. Tiruchi Siva of DMK cited the rule book to say that the ruling of the Chair is supreme and urged him to take up discussion on subjects listed in the Rule 267 notice. Even before he could finish, Harivansh cut him, saying he had not admitted any of the notices as they were not in accordance with the rules. Derek O'Brien of TMC objected to listing for discussion and passage of two important taxation legislations Income-Tax Bill and Taxation Laws Bill - in the supplementary list of business for the day, which was circulated just before start of the House proceedings. Describing the bills as "very crucial," he said the government was making a "mockery of parliament" in the manner in which legislations containing more than 500 clauses were listed. He then went on to state that the Leader of the Opposition and other leaders of opposition parties are all in agreement that the issue of SIR can be discussed through a motion drafted in whatever language the government wants. Harivansh cut him short and called for listed Zero Hour mentions. As Opposition MPs rose on their seats and pressed with their demand for a discussion, he adjourned the proceedings till 2 pm. This article was generated from an automated news agency feed without modifications to text.
NDTV
11-08-2025
- Business
- NDTV
Income Tax (No 2) Bill Clears Lok Sabha. What Is In 'S.I.M.P.L.E' New Law?
New Delhi: The Income Tax (No 2) Bill - which seeks to replace the six decades old Income Tax Act of 1961 and make the laws S.I.M.P.L.E to understand - cleared the Lok Sabha sans opposition debate Monday afternoon, but to the cacophony of INDIA bloc MPs protesting the voter list revision in poll-bound Bihar. Finance Minister Sitharaman used that acronym in February, when she first tabled a first draft of the bill, to refer to its guiding principles. Those principles are: ' S treamlined structure and language; I ntegrated and concise; M inimised litigation; P ractical and transparent; L earn and adapt, and E fficient tax reforms'. That first draft was then referred to a select committee led by the ruling BJP's Baijayant Panda. The committee made 285 suggestions and most have been accepted, Ms Sitharaman said this afternoon. The revised bill carries that mission further, Mr Panda said. He said the new draft further simplifies the decades-old tax structure and helps individual taxpayers and MSMEs avoid unnecessary litigation. The Income-Tax Bill, 2025 has been introduced in the Lok Sabha today. The Bill aims to simplify the tax system for all and is built on these core "SIMPLE" principles:⬇️ — Income Tax India (@IncomeTaxIndia) February 13, 2025 "The 1961 Income Tax Act has undergone over 4,000 amendments and contains over five lakh words. It has become too complex. The new bill simplifies that by nearly 50 per cent..." he said. Apart from simplifying the language, the No 2 Bill clarifies deductions and strengthens cross-referencing across provisions, and addresses ambiguities around income from house property, including standard deductions and pre-construction interest on home loans. It also introduces clearer definitions for terms such as 'capital asset', 'micro and small enterprises', and 'beneficial owner', while aligning tax treatment for pension contributions and scientific research expenditures. It is set to come into force from April 1, 2026. Some Proposed Changes In New Draft: Relief over tax refunds - Taxpayers can claim refunds even in case of late filing of returns. No penalty on late TDS filing - There will be no financial penalties in case of late filing of TDS. Nil-TDS certificate - Taxpayers who don't have tax liabilities, i.e., they don't pay income tax, can claim 'nil certificates' in advance. This is applicable to both Indian and non-resident taxpayers. Commuted pensions - There will be an explicit (in the earlier draft it was an implicit mention) tax deduction for commuted pension, lump sum pension payments, for certain taxpayers. This applies to those receiving pensions from specific funds, such as the LIC Pension Fund. Inter-corporate dividends - Deductions for inter-corporate dividends, i.e., dividends a company receives from shares held in another company, has been reinstated as under Section 80M. In the first draft of the new Income Tax Act this provision had been omitted, particularly for companies opting for the 22 per cent corporate tax regime, i.e., similar to private individuals, corporates were given a lower tax rate if they opted to forego certain exemptions. The omission led to worries over double taxation in multi-tiered company structures. Property tax clarifications - To calculate tax on income from house properties, the standard deduction has been set at 30 per cent, as determined under Section 21. The interest payable on borrowed capital to buy, build, repair, etc. a property will also be deducted. Under the old law, in case of rental property lying vacant for all or part of a year, the annual value of the house (on which tax would be calculated) was based on 'reasonable expected rent' or actual rent received (for part of the year) as long as it is less than the 'reasonable' rent Under the new law, this valuation will be based on the higher of two totals - 'reasonable expected rent' or actual rent received / receivable, if the property or any part of it is let. Aligning MSME Definitions The committee recommended aligning definition of micro and small enterprises. Under the MSME Act (last revised July 2020), micro and small enteprises are classified based on investment in machinery and annual turnover. A micro enterprise would have investment less than Rs 1 crore and a turnover below Rs 5 crore. For a small enterprise that would be Rs 10 and Rs 50 crore. What Else Is In New Tax Bill? Among the proposed changes and amendments is the concept of a 'tax year', which will replace the simultaneous use of 'financial year', or FY, and 'accounting year', or AY. In other words, under current income tax laws, tax for income earned in 2023/24, for example, is paid in 2024/25. NDTV Explains | New Income Tax Bill Vs Old Differences, Exemption Limits, More The proposed change will see the introduction of a 'tax year', so tax on income earned in a year will be paid that year. It has also omitted redundant sections, like those about 'fringe benefit tax'. Tables have been included for provisions relating to TDS, or tax deducted at source, 'presumptive taxation', salaries, and deductions for bad debt. — Income Tax India (@IncomeTaxIndia) February 13, 2025 What Does Not Change? The biggest point in the New Income Tax Bill is that existing tax slabs do not change. The Finance Ministry also said "key words" and "phrases defined in court rulings (will) remain". Meanwhile, also passed Monday was the Taxation Laws (Amendment) Bill, 2025, which provides direct tax relief to Saudi Arabia's sovereign wealth fund and its subsidiaries investing in India.
India.com
11-08-2025
- Business
- India.com
LS passes Two Key Tax Bills Amid Oppn Protest Over SIR; Both Houses Adjourned For The Day
In a brief but consequential sitting on Monday, the Lok Sabha passed two major financial legislations the Income-Tax Bill, 2025 and the Taxation Laws (Amendment) Bill, 2025 amid loud protests by opposition members over the Special Intensive Revision (SIR) of electoral rolls. The Bills were moved by Union Finance Minister Nirmala Sitharaman, who urged the House to consider amendments to the Income-tax Act, 1961 and the Finance Act, 2025. The session resumed at 4 p.m. with Sandhya Rai presiding over the proceedings. Despite the din created by opposition members chanting slogans such as "Vote ki chori band karo" and "SIR wapas lo", the Bills were passed via voice vote. The Income-Tax Bill, 2025 seeks to replace the six-decade-old Income-tax Act, 1961 and incorporates over 285 recommendations made by the Parliamentary Select Committee chaired by BJP MP Baijayant Panda. The revised draft simplifies tax language, clarifies deductions, and strengthens cross-referencing across provisions. Notably, it addresses ambiguities around income from house property, including standard deductions and pre-construction interest on home loans. The Bill also introduces clearer definitions for terms such as 'capital asset,' 'micro and small enterprises,' and 'beneficial owner,' while aligning tax treatment for pension contributions and scientific research expenditures. It is set to come into force from April 1, 2026. The accompanying Taxation Laws (Amendment) Bill, 2025 introduces targeted reforms. It extends tax exemptions to subscribers of the Unified Pension Scheme (UPS), aligning it with benefits under the New Pension Scheme (NPS). It also provides direct tax relief to the Public Investment Fund of Saudi Arabia and its subsidiaries investing in India, under Section 10 (23FE) of the Income-tax Act. Additionally, the Bill refines provisions related to block assessments in income tax search cases, aiming to streamline the treatment of pending assessments and reassessments during search operations. Despite the legislative significance, the session was overshadowed by opposition protests demanding the withdrawal of the SIR process, which they allege compromises voter integrity. The Chair eventually adjourned the House till Tuesday. The passage of these Bills signals the government's intent to modernise India's tax architecture while navigating a politically charged monsoon session. Rajya Sabha also adjourned for the day after special members on certain public issues including use of excessive mobile phone among youngesters, easy access for young generation, even children to obscene material through Internet etc.
