The Income Tax Bill, 2025, was envisioned as a comprehensive replacement of the existing Income Tax Act, 1961, which has governed India’s direct taxation system for over six decades. The idea of rewriting the tax law was first mooted in earlier budgets by the Narendra Modi-led government, with the objective of aligning tax structures with global best practices, enhancing ease of compliance, reducing litigation and making the tax code more transparent and contemporary.
In the Income Tax Bill, the Select Committee had suggested two important changes for citizens earning income from their house properties. First, the 30% standard deduction, which is already allowed after municipal tax deductions, should be clearly mentioned in the revised Income Tax Bill law. Moreover, the benefit of home loan interest deductions, which are now available only for self-occupied properties, should also be extended to rented properties.
The bill sought to simplify provisions, rationalise exemptions, and rework definitions, all while addressing loopholes that have often led to tax evasion or prolonged legal disputes. It also aimed to cater to the modern digital economy, including better frameworks for taxing virtual digital assets, cryptocurrencies and income arising from cross-border digital transactions. -(IndiaTV)
