Income Tax Bill 2025 withdrawn; revised new tax bill expected on August 11

Income Tax Bill 2025 withdrawn. Finance Minister Nirmala Sitharaman on Friday (August 8, 2025) moved to withdraw the Income Tax Bill 2025 in the Parliament.

The Government is expected to introduce the revised Income Tax Bill 2025 on Monday (August 11, 2025) in the Lok Sabha.

"FM @nsitharaman moves to withdraw the Income-tax Bill, 2025, as reported by the Select Committee, which aimed to consolidate and amend the law relating to income tax," Sansad TV posted on X today (August 8, 2025).

The government is likely to come out with an updated version of the legislation after incorporating changes suggested by the Select Committee.

According to PTI, the updated version of the Income Tax Bill may incorporate most of the recommendations of the Select Committee.

"To avoid confusion by multiple versions of the Bill and to provide a clear and updated version with all changes incorporated, the new version of the Income Tax Bill will be introduced for the consideration of the House on Monday," the news agency quoted sources as saying.

The revised Income Tax Bill will replace the six-decade-old Income Tax Act, 1961.

The Income Tax Bill 2025 was first introduced in the Lok Sabha on February 13, 2025. However, soon after the introduction of the revised Bill, it was referred to the Select Committee for scrutiny.

Last month, the Select Committee, chaired by Baijayant Panda, had suggested several changes in the Income Tax Bill.

The Select Committee favoured continuing tax exemption on anonymous donations made to religious-cum-charitable trusts in the new law. It also suggested that taxpayers should be allowed to claim TDS refund even after the ITR filing due date without paying any penal charges.

Meanwhile, the withdrawn Income Tax Bill exempted non-profit organisations (NPOs) from taxing anonymous donations received by purely religious trusts. However, such donations received by a religious trust that may also have other charitable functions, like running hospitals and educational institutions, will be taxed as per law, the new bill said.