The new Income Tax Bill passed in the Lok Sabha on Monday includes several important provisions of the current law as well as some new amendments. In the Income Tax (Number 2) Bill, TDS (tax deduction at source) has been maintained for filing income tax returns (ITR) for claims and tax exemption on anonymous donations given to all religious and charitable trusts. It was proposed to remove these provisions in the original Income Tax Bill introduced in Parliament in February this year.
What changes have been made in the new income tax bill
By adding the word ‘profession’ in the provision 187 of the Income Tax (Number 2) Bill, the professionals, whose annual receipts are more than Rs 50 crore, have been given the facility to adopt the prescribed electronic payment mode. In addition, the provisions related to furthering the losses in income have been re -designed to present the provisions related to it. In addition, the deadline for filing the details of reform in TDS claims has also been reduced to two years, which was six years in the Income Tax Act, 1961.
Complaints expected to reduce significant decrease
Sources in the Central Board of Direct Taxes (CBDT) said, “This provision is expected to reduce a significant decrease in complaints of tax deducted units.” Almost all the recommendations made by the Select Committee have been included in its report submitted on July 21 in the Income Tax (No. 2) Bill, which is going to replace the Income Tax Act, 1961. The original Income Tax Bill, 2025 was sent to the Select Committee.
Registered non-profit organizations (NPOs) will also get tax exemption
The Select Committee had suggested the restoration of the provisions of the Income Tax Bill 1961 on the taxation on donations to non-profit organizations (NPOs) or charitable trusts. In the case of anonymous donation received by non-profit organizations (NPOs), now registered non-profit institutions (NPOs) with both religious and charitable objectives will also be taxed. However, the donation received will be taxed according to the law on the donation received by a religious trust, which does other charitable work like running hospitals and educational institutions.
The concept of receipts has been replaced by the concept of income
“The bill has been associated with the current provisions of the Income Tax Act, 1961,” sources said, “The provisions on anonymity donation have been associated with the current provisions of the Income Tax Act, 1961. Now registered non-profit organizations with mixed objectives have also been exempted.” Along with this, a provision has been made to impose tax only on the actual income of non-profit organizations (NPO) using the word ‘income’. Sources said, “The concept of receipts in the Income Tax Act, 1961 have been replaced by the concept of income.”
People will be able to claim back even after the deadline
This bill has brought relief to those people who want to get TDS refund despite not being compulsory to file income tax returns within the stipulated time. The earlier proposed bill provided that the taxpayer would have to file income tax returns within the stipulated date to get TDS refund. But it has been changed on the suggestion of the Select Committee.
Now people who are not obliged to file income tax returns, will be able to claim TDS refund even after the due date. The bill also includes provisions related to tax exemption to the shareholders of Integrated Pension Scheme (UPS). In addition, a new system of wholesale evaluation and Saudi Arabia’s Public Investment Fund have also been included in the Income Tax Search cases.
