Income Tax Bill – 2025 Proposed In Parliament On 1st February, 2025 And Will Pass In March, 2025
It is open fact that in our country, Budget is produced in Parliament in the month of February and put for discussion, thereafter making some changes as raised during discussion final budget passed and announced in the month of March, and become Act. For budget 2025, it was produced on 1st February, 2025 and put for discussion. Due to simplification of Income Tax Act, it has been produce as Income Tax Bill 2025. In the Bill, instead of section they change as clause, simplification of language and other changes are made.
The changes which are propose in Income Tax Bill, 2025, have a look on some important changes.
Rebate u/s 87A:
Under the provision of Section 87A, Indian resident person, whose income is not more than Rs. 5,00,000, will get deduction of 100% of the tax payable by him. In other words an individual who earns up to Rs. 5,00,000 has not to pay any tax.
As per Finance Bill, 2023 section 115BAC(1A), to provide relief to an individual, whose total income is Rs.7,00,000 will get deduction up to Rs.25,000 from income tax. If the total income is more than Rs.7,00,000 marginal relief is given.
From assessment year 2026-27, residential individual whose income is taxable u/s 115 BAC (1A), followings proposals are made.
- Income u/s 115BAC(1A) on which income tax is payable is Rs.7,00,000 now increase to 12,00,000 and deduction u/s 87A, rebate is increase from Rs. 25,000 to Rs. 60,000
- New proviso added to section 87A, so that deduction should not increase as rate provided u/s 115 BAC (1A).
Simplification of Tax provision of Charitable Trusts/Institutions:
Any income of any trust or institution registered u/s 12AB is exempt if fulfill all conditions mentioned therein. It has been provided u/s 12A, that a registered trust or institution will get deduction of section 11 and 12. It has been provided under section 13, that if trust or institution not fulfill the requirements, deductions of section 11 and 12 not available.
Simplification of Cancellation of Trust or Institution registration: If any trust or institution has registered temporarily, as per section 12AB (4), Principal Commissioner or Commissioner of Income tax may canceled registration of trust or institution, if they find any breviary during last year.
Again u/s 12A(1)(ac), if the application for registration is no complete or any old/wrong information is provided. For this any small mistake can cancelled the registration or as per Chapter XII-EB on the income of trust hey have to pay income tax.
Therefore there is a proposal that for incomplete application, cancellation order should not pass.
Time limit extended for small trust or institution:
When trust or institution registered u/s 12AB, time limit of 5 or 3 years are provided. It is found that every five years trust or institution have to make application again is little bit difficult for small trust.
The time limit of 5 years proposed to be increased from 5 years to 10 years. Here also there is one condition is to be full fill that total income of the trust or institution should not exceed rupees five cores.
Simplification of relative under Section 13(3):
As per Section 13(3) of the Act, author of the trust or founder of the trust or institution or substantial contributor to the trust or institution or any relative of author, founder or substantial contributor, etc.
“Substantial Contributor” for this purpose means a contributor whose total contribution up to end of relevant previous year exceeds Rs.50,000[Section 13(3)(b)].
It is proposed that the amount of contribution should be increase from Rs.50,000 to Rs. 1,00,000.
Author Bio
