The Union government on Friday withdrew the 2025 Income Tax Bill from Parliament.
A new bill will be introduced “in due course”, the government said.
The bill was introduced in the Lok Sabha on February 13 and referred to a select committee for scrutiny on the same day.
The decision to introduce a new bill was taken to incorporate suggestions provided by the select committee, which submitted its report on July 21.
“Almost all of the recommendations of the select committee have been accepted by the government,” the government said. “Suggestions have also been received that need to be incorporated to convey the correct legislative meaning.”
While the draft legislation that was withdrawn did not propose major structural changes to the law, Union Finance Minister Nirmala Sitharaman had said that it was aimed at simplifying the language of the tax code and removing redundant provisions.
The Union government had proposed that the bill, if cleared by Parliament, would take effect in the financial year 2026-’27. Once enacted, it was to replace the 1961 Income Tax Act, which has been amended several times.
The finance minister had proposed the introduction of the direct tax bill while presenting the Budget on February 1.
The draft Income Tax Bill comprised 536 sections, as compared to 298 in the current law. The number of schedules in the draft legislation was 16 as compared to the 14 in the existing law.
The Opposition said in February that the government had made the proposed legislation more complex than the existing law.
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