Income-Tax Bill 2025: Lok Sabha's Select Committee suggests these changes
What's the story
The Lok Sabha's Select Committee, headed by BJP's Baijayant Panda, has submitted a comprehensive report on the proposed Income Tax Bill, 2025. The panel of 31 members was formed to review the bill and recommend improvements. It was submitted on the first day of the Monsoon Session as per schedule. The bill was introduced by Finance Minister Nirmala Sitharaman on February 13. So, what are the recommendations? Let's see.
Key suggestions
Clearer rules on R&D deductions
The Select Committee has recommended changes to several definitions in the bill, such as "capital asset," "infrastructure capital company," and "micro and small enterprises." The goal is to make the law more self-contained and easier to interpret. To improve fairness for property owners, the committee suggested changes in how the deductions for house property income are calculated. It also recommended permitting people to carry forward losses even if there are temporary changes in shareholding, provided continuity is later restored.
Business support
Suggestions to protect taxpayers' rights
The Select Committee wants clearer rules on research and development (R&D) deductions and tax breaks for businesses dealing with biodegradable waste. It sought more clarity around the definition of "parent company" and "status" in tax appeals. To protect taxpayers' rights, the committee suggested reintroducing the phrase "in the circumstances of the case" in rules around tax avoidance.
Non-profit protection
Measures to safeguard religious, charitable trusts
The committee has made several suggestions to protect the religious and charitable trusts. These include imposing 30% tax on anonymous donations and exempting fully religious trusts. It also suggested retaining provisions for "deemed application" of income, which is crucial for organizations receiving delayed funds. For concerns over mandatory filing of returns for refunds, the body recommended removing this requirement for those with incomes below the taxable limit, especially if tax has already been deducted.