NEW DELHI: Despite persistent protests from the Opposition, the Lok Sabha on Monday passed two significant tax-related bills — the Income-Tax (No. 2) Bill, 2025 and the Taxation Laws (Amendment) Bill, 2025.
The Income-Tax (No. 2) Bill, 2025 aims to consolidate and update the Income Tax Act of 1961, effectively replacing the existing legislation. This bill incorporates nearly all recommendations made by the Select Committee chaired by senior BJP member Baijayant Panda.
The Taxation Laws (Amendment) Bill, 2025 proposes amendments to the Income Tax Act, 1961, and the Finance Act, 2025. It primarily seeks to grant tax exemptions to subscribers of the Unified Pension Scheme (UPS).
Finance Minister Nirmala Sitharaman introduced both bills in the Lok Sabha earlier in the day.
According to the statement of objects and reasons for the Income-Tax (No. 2) Bill, 2025, “Almost all recommendations of the Select Committee have been accepted by the government. Additionally, suggestions from stakeholders have been incorporated to clarify the proposed legal provisions.”
The Select Committee had recommended various changes to the original Income-tax Bill, 2025, which was initially presented in the Lok Sabha on February 13.
“The revisions include drafting corrections, phrase alignments, consequential modifications, and cross-references. Consequently, the government decided to withdraw the original Income-tax Bill, 2025 as reviewed by the Select Committee, and prepare the Income-tax (No. 2) Bill, 2025 to replace the Income-tax Act, 1961,” the statement added.
The Taxation Laws (Amendment) Bill, passed by voice vote, also introduced changes related to block assessments in income tax search cases. It provides certain direct tax benefits to Saudi Arabia’s public investment funds and amends both the Income-tax Act, 1961 and the Finance Act, 2025.
The government had announced in July that tax benefits applicable under the New Pension Scheme (NPS) would also extend to the Unified Pension Scheme (UPS), which came into effect on April 1, 2025.
Both bills were passed amid loud Opposition protests over the revision of electoral rolls in Bihar. Following their passage by voice vote, the Lok Sabha was adjourned for the day.
