TAXATION LAWS (AMENDMENT) BILL, 2025 & INCOME-TAX (NO. 2) BILL, 2025

Current Context : The Lok Sabha passed two bills aiming to simplify and modernise India’s income tax framework.

ABOUT INCOME-TAX BILL, 2025

• Purpose: Replace the complex 1961 Act with simplified provisions.
• Key Features:
  • Broadened deductions (family pension, gratuity).
  • Separate Minimum Alternate Tax (MAT) and Alternate Minimum Tax (AMT)s
  • AMT exemption for LLPs with only capital gains income and no deductions claimed.
  • Electronic payment mandate for professionals with receipts above ₹50 crore.
  • Updated definitions for capital asset, micro and small enterprises, beneficial owner.

ABOUT TAXATION LAWS (AMENDMENT) BILL, 2025

• Purpose: Amend Income-tax Act, 1961 and Finance Act, 2025.
• Reforms:
  • Unified Pension Scheme (UPS) with tax exemptions.
  • Direct tax relief to Saudi Arabia’s Public Investment Fund.

Streamlined rules for pending search case assessments