Lok Sabha Approval of the New Income Tax Bill

The Lok Sabha has approved a new income tax bill that introduces significant changes, replacing the Income Tax Act of 1961. Key aspects of this bill include the removal of the alternate minimum tax on Limited Liability Partnership (LLP) firms and permitting refund claims even if taxpayers miss the filing deadlines.

Key Features of the Income Tax (NO.2) Bill

• Replacement of the Income Tax Act, 1961: The new bill aims to simplify tax language by halving the number of chapters and using easier-to-understand terminology. 
• Conceptual Changes: Replaces "assessment year" and "previous year" with "tax year."
• Provisions for Loss Carry Forward: Maintains the current provisions, allowing losses to be carried forward. 
• Exemptions and Deductions:
  • Exempts non-profits from taxes on anonymous donations if received by purely religious trusts.
  • Reintroduces deductions for inter-corporate dividends under concessional tax rates.
  • Under the Liberalised Remittance Scheme, no tax is collected at the source on remittances for education.
• Electronic Payment Rules: Includes 'profession' with 'business,' requiring professionals with an income of over ₹50 crore to use the prescribed electronic payment modes. 
• Clarifications: Clearly defines deductions for commuted pension and gratuity received by family members. 

Incorporation of Recommendations and Industry Feedback

• The new bill has incorporated nearly all the recommendations of a select committee. 
• It has also been positively received by industry experts for easing compliance and aligning with existing legislation.