The Centre has officially withdrawn the much?anticipated Income?tax Bill, 2025, which was originally introduced in the Lok Sabha on February 13, 2025 and subsequently referred to the Select Committee the same day.

The Income-tax Bill, 2025 was a comprehensive legislative proposal aimed at overhauling India’s existing tax framework by replacing the six-decade-old Income-tax Act, 1961.

The Bill sought to simplify tax laws, enhance compliance, and align the country’s taxation system with contemporary economic realities and global best practices.

It proposed structural changes such as clearer definitions, reduced litigation, digital integration for taxpayer services, and a more transparent regime for tax administration.

Additionally, it aimed to consolidate various provisions and eliminate outdated clauses to create a streamlined and efficient tax code.

Following extensive deliberations, the Select Committee presented its report in Parliament on July 21, 2025.

The Government accepted nearly all of the Committee’s recommendations.

However, officials also highlighted the necessity to integrate additional proposals to ensure the legislation conveys the correct legal intent.

In view of these developments, the decision has been taken to withdraw the existing draft of the Income?tax Bill.

A new Bill will be introduced in due course, intended to replace the existing Income?tax Act, 1961.

Sources from the Ministry emphasised that this approach will allow Parliament to consider a refined and legally robust framework—aligning taxation law with modern requirements while preserving clarity and legislative precision.

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