New bills introduced with the aim of consolidation, simplification, and amendment of income-tax laws and the Income Tax Act, 1961.
Income-Tax Bill, 2025
- Objective: Over 6 decades of amendments have made the 1961 Act cumbersome and complex, reducing administrative efficiency; the Income-tax Bill, 2025 seeks to simplify and modernise it.
- Key features
- Deduction available to companies as well.
- Family Pension & Gratuity Deductions extended to family members.
- Minimum Alternate Tax (MAT) & Alternate Minimum Tax (AMT):
- Separated into two subsections
- AMT applies only to non-corporates claiming deductions.
- Limited Liability partnership (LLPs) with only capital gains income exempt from AMT if no deductions are claimed.
- Digital Economy Support: Adds “profession” to mandate electronic payment modes for professionals with receipts exceeding ₹50 crore.
- Simplified Tax Language: Easier drafting and improved cross-referencing.
- Updated Definitions: “Capital asset,” “micro and small enterprises,” “beneficial owner.”
Taxation Laws (Amendment) Bill, 2025
- Amend: The Income-tax Act, 1961 and The Finance Act, 2025
- Objective: To provide income tax exemptions and benefits under new developments.
- Major reforms:
- Unified Pension Scheme (UPS): Tax exemptions aligned with New Pension Scheme benefits.
- Foreign Investment Relief: Direct tax relief to the Public Investment Fund of Saudi Arabia & subsidiaries.
- Search Cases: Streamlining treatment of pending assessments/reassessments in block assessment procedures.