Nirmala Sitharaman Tables Revised Income Tax Bill, 2025 in Lok Sabha

The Lok Sabha on Monday passed the Income Tax (No. 2) Bill, 2025, a revised version of the earlier Income Tax Bill, without any debate, despite loud protests from Opposition members. The new legislation seeks to replace the Income Tax Act of 1961 and marks a major overhaul of India’s tax framework.

Finance Minister Nirmala Sitharaman introduced the revised Bill earlier in the day, after the government withdrew the previous version on August 8 to incorporate suggestions made by a Select Committee led by BJP MP Baijayant Panda. The Committee submitted 566 recommendations in its 4,584-page report on July 21, many of which were accepted.

The new Bill has been significantly streamlined, reducing the number of sections from 819 to 536, chapters from 47 to 23, and cutting down the word count from 5.12 lakh to 2.59 lakh. It also introduces more visual aids for clarity, expanding tables from 18 to 57 and formulae from 6 to 46.

However, the Bill has sparked privacy concerns. It broadens the powers of income tax authorities, allowing them to access, and even forcibly override, passwords to digital accounts and devices during search and seizure operations. This includes access to emails, social media, and messaging platforms such as WhatsApp.

The Select Committee defended these provisions, citing instances of “incriminating evidence” found in electronic records. But several Opposition MPs submitted dissent notes. Congress MP Amar Singh warned against excessive surveillance powers, while RSP leader N.K. Premachandran argued the changes infringe upon the Right to Privacy upheld in the Supreme Court's Puttaswamy judgment.

Despite these concerns, the Bill was passed amid protests related to electoral roll revisions in Bihar, with the Opposition walking out in protest. The Bill now awaits consideration in the Rajya Sabha.