The Committee was appointed to review the new Income Tax Bill 2025, and gave recommendations to modernise India’s tax code while ensuring fairness, transparency, and fewer disputes.
Key recommendations
- Upheld the powers of tax officials under the new IT bill: The Bill has provisions for access, forcibly if necessary, the social media and private emails in search and seizure operations.
- Updating definitions: Aligning definitions of "capital asset", "infrastructure capital company", and "micro and small enterprises" with current laws.
- Business and startup support: Clearer R&D deduction rules, tax breaks for biodegradable waste handling businesses, and clarity on "parent company" and "status" definitions in tax appeals.
About Income-Tax Bill, 2025
It seeks to replace the Income-Tax Act, 1961. The bill aims to simplify the language and remove redundant provisions of the Act. Key provisions include:
- Reduce Volume: The bill removes 283 sections and 24 chapters from the existing 1961 Act.
- Language Simplification: Introduction of 'tax year' instead of the existing terminologies like ‘financial year’ and ‘assessment year’.
- Provision for Virtual Digital Assets: Defines "virtual digital asset" and "electronic mode" along with provisions on their taxation.
- Other: No major tax policy changes, no modifications of tax rates, preserving predictability for taxpayers, Consolidation of amendments, etc.
