Latest news with #IncomeTaxBill2025
Mint
12 hours ago
- Business
- Mint
TDS refund rules to be made simpler under Income Tax Bill 2025? Here's what we know
Taxpayers often have to file income tax returns just so to claim a refund for having tax deducted at source for various reasons even when their income does not fall under the taxable bracket. The government is reportedly working on fulfilling this requirement simpler now. Instead of filing ITRs solely for claiming TDS refund, taxpayers may be able to do it by just filling up a simple form, according to a report by The Hindustan Times. The Select Committee on the Income Tax Bill 2025 made a recommendation to this effect to the government, the report said citing functionaries related directly with the legislation. 'The panel felt that the current mandatory requirement to file a return solely for the purpose of claiming a refund can inadvertently leads to prosecution, particularly for small taxpayers whose income falls below the taxable threshold but from whom TDS has been deducted. In such cases, the law should not compel a return merely to avoid penalty,' the official, who was not named, was quoted as saying by the newspaper. The government has accepted the suggestion and will implement it as an amendment to the bill, the person said. Two other panel members cited by HT confirmed that the idea is for the CBDT to work out a simple form for those who are not under the tax threshold, instead of them filing IT returns. 'We discussed it in the meeting. The idea is instead of filing an ITR, one can file a simple form for claims. The process will be linked with Form 26AS.' Form 26AS is a consolidated statement of tax deducted and collected at source. The Select Committee on the Income Tax Bill 2025 suggested to do away with a clause that says 'a person who intends to make a claim of refund under Chapter 10' should file an IT return. Under the recent amendments to the new tax regime, people getting salaries up to ₹ 12.75 lakh do not need to pay taxes. However, when salaried employees do not present the required documents, the employer deducts TDS. The panel also added more accountability to the controversial provision that empowers tax officials get access to a taxpayer's digital devices. One of the functionaries quoted by HT said that the new bill aims to simplify income tax laws as well as make tax administration nimble and efficient. 'For example, the existing Income-Tax Act, 1961 does not specifically mention digital devices, which often become a contentious point in case of litigation. This bill seeks to specifically authorise officials to gain access to digital devices, besides books of account, ledgers and other manual records showing details of income and expenditure,' he was quoted as saying. The new law is likely to be implemented from April 1 next year, the person reportedly said. A Parliamentary panel examining the Income Tax Bill-2025 on Wednesday made 285 suggestions on the draft legislation
Mint
2 days ago
- Business
- Mint
Direct tax law simplification to set stage for fresh reforms
New Delhi: The Income Tax Bill 2025, set to be moved in the monsoon session of Parliament to simplify the direct tax law, will set the stage for another round of reforms which will be more substantive in nature in subsequent years, said two people informed about the discussions in the government The finance ministry is of the view that once the over-six-decade-old Income Tax Act, 1961 is simplified and made more readable, targeted reforms can be achieved in taxation of personal and corporate income. This will be done through the annual Finance Acts, said one of the persons quoted above. Key tax disputes await reform Major areas of dispute set to be ironed out in the future include how multinational corporations value their cross-border transactions with group entities, which in turn has an impact on the profits offered for taxation in India. Reforms may also target disputes on whether certain income is to be classified as capital gain or as business income; eligibility of tax exemptions; and existence of a business presence or 'permanent establishment' in India by offshore companies which make profits attributable to them taxable in India, according to experts. 'The new Income Tax law has to be implemented from 1 April 2026, not from 'a date to be notified,' – the usual language used in framing laws. Once the new law is in place, further reforms can be considered but it has to be weighed against the need for not further complicating the law," said the person quoted above, who spoke on condition of not being named. Read more: Simplify GST: It's time for a single all-India identification mandate The government has received suggestions for reforms not just for simplifying the income tax law, but on more substantive issues as well, said the person. 'The current legislative effort is restricted to just rewriting and renumbering of the direct tax law while emerging tax challenges have to be addressed separately in future," explained Ved Jain, former President of Institute of Chartered Accountants of India. Jain gave an example from the arena of digital economy – specifically, the virtual delivery of services from across the border and its taxation. 'This is increasingly becoming relevant as physical presence is becoming less relevant for delivery of services," said Jain. Select committee report finalized A third person, who also spoke on condition of not being named said that the Lok Sabha select committee formed to examine the income tax bill, led by Bharatiya Janata Party MP Baijayant Panda, met on Wednesday to finalize its report. 'The committee unanimously approved the report, which is tentatively scheduled for tabling in Parliament on the first day of the monsoon session," the person said, adding that the report entails about 285 suggestions. The monsoon session is set to begin on Monday. The select committee's recommendations for modification cover sections dealing with undisclosed income as well as definitions of beneficial owner, capital asset, associated enterprise and investment funds but retains the other concepts and provisions in the draft bill as tabled by the government, said a fourth person, who also spoke on condition of not being named. The Select Committee left provisions relating to taxes deducted at source (TDS) and income deemed to arise in India largely untouched with only marginal changes, this person said. The concept of tax year is left unchanged in the committee's report, this person said. The draft bill introduced the concept of tax year to specify the year of earning income for which the tax liability is computed. Read more: Tax rules for F&O, intraday, and stock trading—what you must know Queries emailed to the finance ministry, the Central Board of Direct Taxes and to the Select Committee on Wednesday seeking comments for the story remained unanswered at the time of publishing. Jain said one issue that should ideally be addressed by the Select Committee is the concern around the power of tax officials to access the computer systems of assesses by overriding the access code in certain circumstances, as was provided in the draft bill. The draft bill explicitly allowed officials to gain access to any computer system or virtual digital space by overriding the access code to get information, with permission from superiors. The select committee approved the government's proposal on such access to information, with minor change in wordings. The committee also sought to remove ambiguity in drafting the bill across sections, including on the issue of securing tax refunds. Experts have several suggestions for further reforms. 'The New Income-tax Bill, 2025, while being positioned as a simplification and modernization of India's tax code, has not addressed several expectations and long-standing demands raised by industry bodies, tax professionals, and taxpayers," said Amit Maheshwari, Tax Partner AKM Global, a tax and consulting firm. These expectations include rationalization and simplification of the capital gains tax regime—unifying holding periods, tax rates, and treatment across asset classes, explicit exclusions or clearer thresholds for General Anti-Avoidance Rules (GAAR), especially in cases involving commercial substance, liberalized and clearer rules for non-resident status and mandatory time limits for disposal of appeals, said Maheshwari. GAAR prohibits transactions designed to avoid tax and how those should be taxed. Read more: How India's GST revenues can sustain their incline
Mint
2 days ago
- Business
- Mint
New Income Tax Bill: Taxpayers can expect THESE changes in the legislation likely to be in force from April 1 next year
The Monsoon session of Parliament will kick off on July 21 and end on August 12 and several new bills are proposed to be tabled during this time. Among these, one of the most awaited legislations is the New Income Tax Bill 2025. Lok Sabha's select committee -- which is examining the Income Tax Bill 2025 -- made 285 suggestions. "We have made 285 suggestions to the Bill,' a committee member told PTI when asked about the report. These changes relate to simplifying the language of the draft legislation. Now, the committee will present the report in the Lok Sabha on July 21. Some of the changes recommended include the following. 1. Removal of provision that denies income tax refunds if returns are filed after the due date. The bill requires that a person seeking refunds must mandatorily file income tax returns within the due date. And section 433 of the new IT bill states that a refund is sought only while filing a return. 2. Deduction under section 80M (which is mentioned under clause 148 of the new bill) for inter corporate dividends for the companies which avail the benefit of special rate of rate under section 115BAA was also missed out in the new income bill. So, this is also proposed to be reinstated. 3. NIL TDS certificate can also be availed by taxpayers, per the committee's suggestions, reported Business Standard. In the current version, new I-T Bill only low TDS deduction certificates were available to the taxpayers. The Income Tax Act, 1961 has been in force from April 1, 1962. It was amended 65 times with more than 4,000 amendments. The focus of new income tax bill is on simplification, ease of understanding and clarity. The Bill uses lucid language, active voice and shorter sentences and will remove redundancy and hard-to-understand explanations. The new Bill entails 2.6 lakh words and consists of 536 sections, with the number of chapters reduced to 23. The bill aims to resolve the issues which arise out of interpretation done by various courts of law. The new bill avoids cross-referencing which means referring to multiple provisions to make sense of what is said in one of them. For all personal finance updates, visit here
India Today
3 days ago
- Business
- India Today
Parliament panel proposes revival of key tax relief for companies: Report
A key parliamentary panel has proposed reinstating a crucial deduction under the Income Tax Bill 2025, a move that could bring major relief to Indian companies by avoiding double taxation on inter-corporate dividends, The Economic Times panel has recommended reviving Section 80M of the old tax law, which allowed Indian firms to deduct from their taxable income any dividends received from other domestic companies. Its removal in the new draft bill had raised red flags across corporate India, especially for companies operating within multi-tier structures, where the same dividend income risked being taxed multiple government has accepted the recommendation, indicated the report. The proposal is among over 285 tweaks suggested by the parliamentary select committee, headed by MP Baijayant Panda, which unanimously adopted its report on the government greenlighting the bulk of the recommendations, the reformed tax legislation, meant to overhaul the six-decade-old Income Tax Act, is expected to be passed swiftly in the upcoming monsoon session of stakeholders had strongly lobbied for the return of Section 80M, arguing that its absence would increase tax burdens and discourage efficient corporate committee's report, which will be presented in the Lok Sabha on the first day of the session, reflects several such industry important recommendation involved reinstating language that clarifies residency status for Indians working abroad. The phrase 'for the purpose of employment' has been retained to remove any ambiguity in interpreting residency panel also proposed restoring provisions that allow the tax department to issue a nil withholding tax certificate for specific payments—another rollback of a clause originally removed in the draft may be noted that the panel chose not to alter core provisions of Section 247(1), which deals with searches and seizures, although this section witnessed the most debate during the committee's 36 sittings. Stakeholders who appeared before the panel also raised concerns over the faceless assessment mechanism and called for simplification of TDS rates and Income Tax Bill 2025, first introduced by Finance Minister Nirmala Sitharaman in February, aims to simplify and modernise the tax brings in a slew of changes, including presumptive taxation for non-residents, a revamped framework for business and professional income, strengthened anti-avoidance rules, and streamlined penalties and the committee's mandate was limited to refining the language of the bill rather than overhauling its core, the changes endorsed are expected to address ambiguities and prevent unintended consequences as India prepares to usher in a simpler, more contemporary tax regime.- Ends
Hans India
3 days ago
- Business
- Hans India
Parl panel on I-T Bill adopts report with 285 suggestions
New Delhi: A Parliamentary panel examining the Income Tax Bill 2025 on Wednesday made 285 suggestions on the draft legislation that seeks to modernise and simplify the country's tax laws. The Select Committee of the Lok Sabha to examine the Income Tax Bill-2025, chaired by BJP leader Baijayant Panda, adopted the report on the draft law, which will be presented to the House on 21 July, Monday, the first day of the Monsoon session. "We have made 285 suggestions to the Bill," a committee member said when asked about the report on the Income Tax Bill. The member said the report of the Select Committee will be presented to the Lok Sabha on Monday and the bill is likely to be passed in the Monsoon session. After the submission of the report by the Committee, the government will consider recommendations and if required, then will take approval from the Cabinet before moving the bill for consideration and passage in the Lok Sabha. The government aims to implement the new Income Tax law from April 1, 2026. According to the government, the new Bill aims to simplify language, eliminate redundancy, and streamline procedures and processes to enhance the taxpayer experience. Once enacted, the new Bill will replace the Income Tax Act, 1961 which came into force from April 1, 1962. The 1961 Act has been amended 65 times and more than 4,000 amendments have been made to its various provisions.
