The Lok Sabha August 11, 2025 passed the revised Income Tax Bill

The Lok Sabha on August 11, 2025 passed the revised Income Tax Bill, 2025 without any debate.

The Bill seeks to simplify, rationalise, and shorten the existing Income Tax Act, 1961. It also broadens the powers of income tax officials, allowing them to forcibly break into personal emails and social media accounts of assessees during search operations. The revised Bill was passed amid vociferous protests by the Opposition against the special intensive revision of electoral rolls in Bihar.

Union Finance Minister Nirmala Sitharaman had introduced the previous version of the Bill in the Lok Sabha in February, following which it was sent to a Select Committee chaired by Baijayant Panda for a review. The Select Committee submitted its recommendations on July 21. Following this, the government on Friday (August 8, 2025) withdrew the Bill to incorporate the suggestions made by the committee.

Ms. Sitharaman introduced the updated version — the Income Tax (No. 2) Bill, 2025 — in the Lower House on Monday (August 11, 2025). The Bill has around 2.59 lakh words compared with the 5.12 lakh words in the Income Tax Act, 1961. The number of chapters has been brought down to 23 from 47 and the number of Sections to 536 from 819.

In order to provide greater clarity, the new Bill has increased the number of tables to 57 from 18 and the number of formulae to 46 from six.

Apart from these changes, the new Bill has also tweaked the powers of income tax officials during search and seizure operations.