Select Committee Reports on Income-Tax Bill 2025
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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Definition of Capital Assets: BEFORE, the initial draft of the Bill missed updates introduced recently; NOW, the Committee mandated aligning the definition precisely with the amendments made in the Finance Act, 2025.
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MSME Classification: BEFORE, there were inconsistencies in how micro and small enterprises were identified under tax laws; NOW, the code explicitly aligns these definitions with those established under the MSME Development Act.
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Inter-corporate Dividends: BEFORE, the initial 2025 Bill mistakenly removed deduction benefits for inter-corporate dividends in multi-tier structures for companies paying a 22% concessional tax rate; NOW, this deduction is reinstated to avoid cascading tax liabilities.
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Refunds on Late Returns: BEFORE, the draft strictly disallowed tax refunds if income tax returns were filed after the due date; NOW, the panel recommended amending this provision to offer relief and allow refunds for genuine taxpayers filing belatedly.
Prelims Angle
NCERT Connection
Practice Questions
Q1
Correct Statement(s)With reference to the Lok Sabha Select Committee report on the Income-Tax Bill 2025, consider the following statements: 1. The committee, chaired by Baijayant Panda, reviewed the bill intended to replace the Income Tax Act, 1961. 2. The committee recommended completely abolishing the concessional 22% corporate tax rate to simplify the tax structure. Which of the statements given above is/are correct?