Parliamentary Panel Proposes 285 Changes to Income Tax Bill 2025, Focus on Time-Bound Litigation

The Government of India’s parliamentary panel has recently examined the Income Tax Bill 2025 and has proposed 285 tweaks to the draft version of the income tax bill. Among these tweaks, one is a time‑bound resolution for tax litigations in the Income Tax Bill review. These recommendations are aimed at revising and structuring tax rules.

The select committee of Lok Sabha, chaired by BJP’s Baijayant Panda, reviewed the draft version of the Income Tax Bill, 2025, and adopted its final report on Wednesday, July 16, 2025. The report will now be submitted in the Lower House of Parliament, expectedly on Monday (July 21 – the first day of Parliament’s Monsoon Season), following which the government will re-examine the introduced amendments and will decide whether to accept these recommendations. If the government accepts, then the changes will be further sent to the Union Cabinet for approval.

One of the panel members said, “We have made 285 recommendations. The government has already accepted 250. We have said tax litigations should not linger on and there should be a time-bound resolution, although huge improvements have happened, as can be seen in the case of refunds.”

The Income Tax Bill, 2025, is a new draft law introduced by the Government of India to replace the old Income Tax Act of 1961. Over the years, the 1961 law had become too bulky, complicated, and difficult to understand. The government’s change in the income tax bill has led to a decrease in the size of the bill from 850 to 600 pages. This indicates that a lot of unnecessary, repetitive, and outdated rules have been removed. This new bill was first introduced in Parliament on February 13, 2025. After it was tabled, the bill was sent to a Select Committee of the Lok Sabha for detailed examination, as it was objected to ease its language and structure of the IT Act 1961.

This committee was headed by Baijayant Panda, a Member of Parliament from the BJP. The committee reviewed the bill deeply and came up with 285 revisions (recommendations) to improve it. Among these recommendations, the government has already agreed to over 250 revisions. Meaning, the maximum proposed amendments were discovered to be useful and compulsory.

Among these recommendations, one was that there should be a time-bound resolution of tax litigations. Meaning, court cases and legal disputes related to taxes should not drag on for years. The committee pointed out that although there has already been significant improvement in refund processing, some improvement is required to ensure that disputes are resolved faster and fairly, without long delays.

The government followed three guiding principles while rewriting the income tax bill. First, the bill focuses on simplifying the language and structure so that it is easier for people to read and understand. Second, it makes no major changes to existing tax policies, which ensures that there is continuity and people are not surprised by new rules. Third, there are no changes in tax rates, which means taxpayers can continue planning their finances with stability and confidence. The new bill is aimed at improving navigation and clarity. This will not only help taxpayers but also reduce the chances of confusion and disputes between taxpayers and the tax department.

The Central Board of Direct Taxes (CBDT) has supported the bill, stating that the new format and simplified language will improve clarity and transparency. According to CBDT Chairman Ravi Agrawal, the bill is expected to reduce litigation because clearer laws mean fewer misunderstandings. Similarly, Finance Minister Nirmala Sitharaman earlier said that this new law has been designed to suit the needs of the 21st century and to make tax compliance easier and more efficient for everyone.

Finally, the report prepared by the committee and the updated version of the Income Tax Bill are expected to be presented in Parliament on July 21, 2025, which is the first day of the upcoming monsoon session. If approved, this new bill will become India’s official income tax law and replace the existing law that has been in force since 1961.

To know more introduced amendments in the draft Income Tax Bill, 2025, refer to the PDF below.