New Income Tax Bill / These changes will be made in the new income tax bill! The committee has given 10 major suggestions

New Income Tax Bill: The new Income Tax Bill 2025 will be introduced in Parliament on Monday, August 11 by the Central Government. There are extensive discussions about this bill, and the Parliamentary Select Committee constituted to make it better has given many important suggestions. The detailed 4,584-page report of the committee contains a total of 566 suggestions/recommendations, out of which 285 recommendations are focused on making the tax system simple and clear. Let us take a look at the 10 major recommendations of the committee in this article, which will help in making the new Income Tax Bill more effective.

1. Clarifying definitions further

The Select Committee suggested that the definitions in the bill should be tightened further so that the ambiguity (confusion) is removed and it can be better aligned with the existing tax system. This will make it easier for taxpayers to understand the rules.

2. Change in Income Tax Refund Rules

The committee made an important suggestion that the rule of not giving refund on filing late ITR (Income Tax Return) should be removed. In the old bill, it was mandatory to file ITR on time for refund, but now it has been recommended to remove this rule so that taxpayers get relief.

3. Amendment in Section 80M

Changes have been suggested in Clause 148 (Section 80M) of the new bill, which deals with deduction on inter-corporate dividends. This suggestion is especially for those companies that avail special tax rate.

4. Allowing Zero TDS Certificate

The committee has recommended allowing taxpayers to obtain Zero TDS (Tax Deduction at Source) certificate. This will provide relief to taxpayers from unnecessary tax deductions.

5. Change in the definition of MSME

The definition of micro and small enterprises has been suggested to be made as per the MSME Act. This will make it easier for small and medium enterprises to comply with tax rules.

6. Clarity on advance ruling fees

The report has recommended further clarification of advance ruling fees. This will give taxpayers a better understanding of the rules and avoid unnecessary disputes.

7. TDS rules on Provident Fund

The committee has recommended clarity and simplification in the rules related to TDS on Provident Fund. This will help employees understand the tax rules related to their provident fund.

8. Lower Tax Certificate

The process for lower tax certificate has been suggested to be further simplified. This will be helpful for taxpayers in reducing tax deductions.

9. Change in penalty powers

Changes have been recommended in the bill to bring clarity in the rules related to penalties and reduce unnecessary rigidity. This will reduce undue pressure on taxpayers.

10. No change in tax rates

The Income Tax Department clarified that no change in tax rates has been recommended. There were rumours of change in Long Term Capital Gain (LTCG) tax rates in some reports, but the committee did not give any suggestion on this.