New tax bill passed in Lok Sabha: 1961 Act ends, change from refund relief to TDS rules, know the concept of new tax year | Income tax no 2 bill passed in Lok Sabha 1961 Act Replace Refund TDS Taxation

Income Tax New Bill: The Lok Sabha on Monday passed the Income Tax (No 2) Bill 2025 without opposition debate. The bill was passed when India block MPs were creating a ruckus about Bihar’s voter list revision. This bill will replace the six decade -old Income Tax Act of 1961. Nirmala Sitharaman described the step towards making this bill simple.

285 suggestions involved

The first draft was sent to the Selection Committee after appearing in February, which was chaired by BJP’s Baijayant Panda. Most of the 285 suggestions of the committee have been accepted. The new bill makes the tax structure about 50% simple and will reduce literature for MSMES and individual taxpayers.

Also read: Air India’s big announcement: Delhi-Washington flight will be closed from September 1

Many big changes in the new Income Tax Act

• Tax refund relief: You will be able to claim refund on late ITR filing.
• TDS filing rules: No penalty when filing late TDS.
• Nil-tds certificate: Those who do not have tax liability can already take Nil Certificate (for both Indian and Non-Resident).
• Pension deduction: Commuted pension (lump sum) explicit deduction.
• Inter-corporate dividend: Deduction again applied under section 80M, so that there is no double taxation.
• Property Tax Rules: 30% on income from house property
• Standard deductionHomelone is also deducted on interest.
• Vactive Property Valuction: Now the calculation of the annual value will be on what is more in ‘Reasonable Expected Rent’ and ‘Actual Rent Received’.

Also read: Offline or online, how to earn from home, know 26 special methods

New Tax Year Concept

Now there will be only one tax year instead of ‘Financial Year’ and ‘Assessment Year’. That is, the year in which there will be income, you have to pay tax. Also, Redundant Sections like Fringe Benefit Tax have been removed.

What will not change?

• The current tax slabs will remain the same.
• The key words and phrases will remain defined by court rulings.

When will it apply?

• The new Income Tax Act will be applicable from 1 April 2026.
• Also, Taxation Laws (Amendment) Bill 2025 also passed, which will provide Direct Tax Relief to Saudi Arabia’s Sovereign Wealth Fund and its subsidiaies.