New Income Tax Bill to be taken up for discussion in monsoon session: FM Sitharaman

Finance Minister Sitharaman spoke extensively about the Finance Bill today in the Parliament, adding that the Finance Bill 2025 gives unprecedented tax relief to honour taxpayers.

This new Income Tax Bill, tabled in Lok Sabha by Union Finance Minister Nirmala Sitharaman on February 13, seeks to replace the existing Income Tax Act, 1961 and introduce changes that affect different categories of taxpayers, including individuals, businesses, and non-profit organisations.

In the July 2024 Budget, the government proposed a comprehensive review of the Income-tax Act of 1961. The purpose was to make the Act concise and lucid and reduce disputes and litigation.The government on March 18, encouraged the stakeholders submit their suggestions on the newly introduced Income Tax Bill2025. The Bill is currently under examination by the Select Committee for detailed consideration.

Replying to the questions on Finance Bill 2025 today, FM Sitharaman underscored the Union government's commitment to providing tax certainty and streamlining business regulations as part of the broader vision to build a Viksit Bharat by 2047.

"The Budget aims to do reforms to build Viksit Bharat by 2047. It aims to provide tax certainty, reforms on ease of doing business also we will have a new Income Tax Bill which is currently with a special Committee. This Bill is not brought as part of Finance Bill," Sitharaman stated.

Elaborating on tax reforms, she announced a reduction in customs tariff rates on industrial goods, cutting the number of tariff slabs from 21 to just eight. Additionally, she clarified that either cess or surcharge--not both--can be levied on an item under direct tax provisions.

"We have removed seven custom tariff rates on industrial goods, reducing tariff from 21 to 8 per cent. We have ensured that no one item is a Cess, and a surcharge can be applied. Only one can be levied," says FM Sitharaman while speaking on direct taxes.

Addressing concerns over indirect taxation, the finance minister assured that prasadams from temples, mosques, churches, and gurudwaras would remain exempt from GST.

She also mentioned that a Group of Ministers (GoM) is evaluating GST reductions on ingredients used in preparing these prasadams. Furthermore, she announced that imported drugs for rare diseases--whether by individual patients or research organizations--have been exempted from Integrated GST (IGST). She also highlighted the proposal related to Customs, which aims to rationalize tariff structure and address duty inversion.

"These will also support manufacturing and domestic value addition, promote exports, facilitate trade and provide relief to common people," she added. She further added, "In Budget 2025, we aim to boost domestic production and enhance export competitiveness by reducing duties on raw materials and inputs, making domestic products more cost-effective." (ANI)