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A parliamentary committee reviewing the Income-Tax Bill, 2025 has proposed over 550 changes to improve clarity, reduce taxpayer burden, and resolve legal ambiguities. One of its key recommendations includes allowing small taxpayers to claim refunds even if returns are filed after the due date provided their income is below the taxable limit. The committee also called for improved tax provisions for property owners and clearer rules for non-profits, small businesses, and provident fund withdrawals. These recommendations aim to align the bill with existing laws and address loopholes before implementation.
To ease the compliance burden on ordinary citizens, a parliamentary panel reviewing the Income-Tax Bill, 2025 has recommended that small taxpayers be allowed to claim refunds even if they miss the return filing deadline provided their income is below the taxable limit and tax has already been deducted at source (TDS). The suggestion is part of a sweeping list of 566 changes proposed in the committee's 4,584-page report presented in the Lok Sabha during the past week. Advertisement
The bill was originally tabled in Parliament in February and referred to a Select Committee for closer scrutiny. The committee's report is built on extensive consultations with stakeholders, which led to several suggested drafting corrections and revisions intended to simplify the bill's language and make it more user-friendly. The committee emphasized that taxpayers shouldn't be forced to file returns merely to escape penalties or preserve refund rights.
Significant relief measures were proposed for property owners as well. The panel has recommended that the standard 30% deduction on property income should be calculated only after municipal taxes are subtracted from the property's annual value mirroring current provisions. It also wants the deduction for pre-construction interest to be extended to both self-occupied and let-out properties, ensuring parity in tax treatment.
The panel's suggestions also focus on eliminating legal uncertainties for various stakeholders. For instance, the definitions of micro and small enterprises should be fully aligned with the MSME Act to avoid conflicting interpretations. Regarding non-profit entities, the committee raised concerns over vague terminology such as "income" vs "receipts", anonymous donations, and the contentious concept of deemed application of income. They urged that these ambiguities be resolved to prevent potential litigation.
Other notable recommendations in the report include the need to clarify advance ruling fees, streamline TDS provisions on provident funds, ease access to low-tax deduction certificates, and fine-tune the scope of penalty powers vested with tax authorities. These are all aimed at making the tax law more transparent and fair across sectors.
Source ANI
5th Jun, 2025
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