Income Tax Bill 2025: The government announced to introduce the revised version in Parliament on Monday by taking back the Income Tax Bill 2025. 87A exemption limit 12 lakhs, maximum rebate 60,000, middle class and MSMES will benefit.
New tax regime: The Central Government has formally withdrawn the Income Tax Bill 2025 (Income Tax Bill 2025) introduced in the Lok Sabha on 13 February. Now the revised version will be introduced in Parliament on Monday, including the recommendations of the Select Committee headed by BJP MP Baijayant Jay Panda. The government says that the purpose of withdrawing the old version is to avoid confusion and present a clear, updated bill with all changes.
Promise of simple and transparent tax system
Selection Committee Chairman Baijayant Panda said that the current Income Tax Act (Income Tax Act 1961) of 1961 has passed through more than 4,000 amendments and has more than 5 lakh words, which has made it very complicated. The new bill simplifies it up to about 50% so that common taxpayers can easily understand. He said that the most benefit of this will be to small business owners and MSMEs who do not have enough legal and financial resources to understand the complex tax structure.
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Middle class will get direct benefit
According to the government, new provisions will set up a justified and transparent direct tax system without putting additional tax burden on working and middle classes. There have been extensive changes in tax slabs and rates that will reduce the tax liability of the middle class and save more money in their pockets, which will promote consumption, savings and investment.
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87A exemption limit up to 12 lakhs
Under the Finance Act 2025, the income limit for getting a tax rebate in Section 87A has been increased from Rs 7 lakh to Rs 12 lakh in the new tax regime (Section 115 BAC). The maximum rebate amount has also been increased from Rs 25,000 to Rs 60,000.
Apart from this, the provision of marginal reliable will also be applicable for those with a slightly more income of Rs 12 lakh. According to the Finance Ministry, the new Income Tax Bill will make tax filing easier for common citizens and small businesses.