The select committee of Lok Sabha has found a couple of drafting issues in Clause 21 of the Income Tax Bill 2025, which talks about the annual value of residential house properties and has recommended two key changes. The first change is the deletion of the phase “in normal course” and the second relates to deeming house rent provisions. Chartered Accountants we spoke to said that if the provisions of the Income Tax Bill 2025 were implemented without incorporating these suggestions, the annual value of a house property would have gone up, resulting in a higher tax liability. Thankfully, because of these suggestions, the tax treatment remained the same as it was under the Income Tax Act, 1961.


What did the Select Committee say?
Based on the suggestions from the Income Tax Bill, 2025, here’s what the select committee had to say:

The Committee, after a careful review of Clause 21, identified drafting issues in 21(2) that could lead to ambiguity in determining the annual value of properties experiencing vacancy.
The committee, therefore, recommend two key changes: first, that the phrase "in normal course" be deleted, and second, that the clause be amended to explicitly provide for a comparison of the actual rent received with the "deeming rent," as was available in the existing Act.

The Income Tax department has conducted 465 surveys, leading to detection of undisclosed income of Rs 30,444 crore in the 2024-25 fiscal year, Parliament was informed on Tuesday.

Minister of State for Finance Pankaj Chaudhary in a written reply in the Rajya Sabha said whenever any credible information of 'direct tax' evasion comes to its notice, it takes suitable actions, including surveys, search and seizure operations, assessments, to bring to tax, the undisclosed income.

During FY25, a total of 465 surveys were conducted, which led to detection of undisclosed income of Rs 30,444 crore.

In FY24 and FY23, 737 and 1,245 surveys were conducted by the I-T department and undisclosed income of Rs 37,622 crore and 9,805 crore, respectively, were detected.

The total number of groups searched during FY25 stood at 1,437 and assets seized stood at Rs 2,504 crore.

In FY24, 1,166 groups were searched leading to total asset seizure of Rs 2,555 crore. In FY23, Rs 1,766 crore assets were seized following searches in 1,437 groups.

Total direct and indirect tax arrears stood at over Rs 54.53 lakh crore as of June 30, Parliament was informed on Tuesday.

In a written reply to a question in the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary said, "The total amount of tax arrears pending as on June 2025, under indirect taxes is over Rs 7.01 lakh crore and under direct taxes is over Rs 47.52 lakh crore."

Cumulatively, direct and indirect tax arrears stood at Rs 54.53 lakh crore as of June 30.

Of the total indirect tax arrears, over Rs 2.66 lakh crore pertain to those where pending taxes in individual cases is above Rs 10 crore as of June 2025.

In case of direct taxes, tax arrears above Rs 10 crore as on June 2025 totalled about Rs 35.48 lakh crore.

Further, of the Rs 7.01 lakh crore pending tax arrears under indirect tax, over Rs 3.71 lakh crore is pending due to litigation at various stages.

By Rahul Patni, Partner and Digital Tax Leader, EY India
Imagine a future where filing taxes is as effortless as a few clicks, powered by intelligent digital infrastructure -India is fast making this a reality. The recent Central Board of Direct Taxes (CBDT) notification extending the income tax filing deadline is not merely about extra time; it signals India's unwavering commitment to advancing a seamless, technology-driven tax ecosystem. Tax filing, which was once a largely manual and time-consuming process, has become more efficient particularly for individual taxpayers. With simplified forms, e-filing platforms, and greater automation, preparing and submitting returns now takes much less time than before.

Today, taxpayers often receive refunds almost instantly, a leap powered by sophisticated systems like the Annual Information Statement (AIS) and Taxpayer Information Summary (TIS). Globally, India's pioneering digital tax initiatives like Faceless Assessment Scheme, are gaining admiration. Many emerging economies are looking to emulate such models, drawn by the promise of reduced discretion and enhanced fairness.

Chartered Accountant Aditi Bhardwaj has flagged a critical glitch in the ITR-2 online utility—an error that could cause tax returns to be flagged, adjusted, or rejected under Section 143(1).

In a post on X, Bhardwaj pointed out an inconsistency in how the utility handles capital gains and loss adjustments in the Brought Forward Loss Adjustment (BFLA) and Carry Forward Loss (CFL) schedules.

Here’s what she found:

A taxpayer reported Rs 1,44,108 in Long-Term Capital Gains (LTCG), partially offset by Rs 6,585 in short-term capital loss (STCL).

This brought the net LTCG to Rs 1,37,523, which was further offset by Rs 48,233 in brought forward capital losses from Assessment Year 2023–24.

After adjustments, Rs 89,290 remained, falling under the tax exemption limit of Section 112A.

While the BFLA schedule correctly shows the Rs 48,233 loss as fully adjusted, the CFL schedule continues to show the same Rs 48,233 as a carried forward loss, instead of zero. This inconsistency triggers a validation error when attempting to file the return.

Bhardwaj also noted that, unlike previous years, the current utility does not include a “Set Off” button, which previously allowed taxpayers to manually align loss adjustments across schedules.

New Income Tax Bill, 2025: The Centre has taken a big step towards making the tax system simple and transparent in the country. The Modi government introduced the ‘Income Tax Bill, 2025’ in Parliament during the budget session this year to replace the existing Income Tax Act, 1961. This Bill, after being introduced in the Lok Sabha in February this year, was sent to the Select Committee of the Lok Sabha. The panel recently submitted an over 4,500-page report with observations and suggestions on the Bill to the government.

Now, the government has plans to table the Bill in the ongoing monsoon session of Parliament on August 11. Experts are of the view that this Bill once passed will be the biggest change in India’s tax system after decades.

Here are 5 major changes in the Income Tax Bill, 2025
1. Number of chapters reduced to 23

The existing Income Tax Act, 1961 has a total of 47 chapters, which became very complex due to multiple amendments. In the new Bill, the number of chapters has been reduced to only 23, making it easier to read and understand. This change is a relief especially for taxpayers and professionals.

Company secretaries' apex body ICSI on Thursday continued to pitch for recognising its members as accountants and urged the government to undertake a comprehensive overhaul of taxation laws.

The comments from the Institute of Company Secretaries of India (ICSI), set up under an Act of Parliament, come against the backdrop of the Parliamentary Select Committee not considering the body's submission to be included in the definition of 'accountant' in the Income Tax Bill.

In a statement, ICSI said it will continue to advocate recognition of the company secretary profession within the definition of 'accountant', and ensure that the roles and opportunities for company secretaries are effectively incorporated into policy-making processes.

To realise the vision of Viksit Bharat, there is a need for a holistic policy review and the government should undertake a comprehensive overhaul of taxation Laws, with a clear focus on inclusive and future-ready reforms, it noted.

Sudhir Kaushik Co-founder & CEO, TaxSpanner: Switching between mutual funds—whether within the same AMC or to a different one—is not tax-free. It is treated as a redemption followed by a fresh investment, thus attracting capital gains tax. If the original investment was in equity-orient ed mutual funds held for over a year, gains are subject to Long-Term Capital Gains (LTCG) tax. LTCG exceeding Rs 1.25 lakh in a financial year is taxed at 12.5% with indexation. To reduce tax impact, consider redeeming in phases over 3-5 years to utilise the annual exemption.

I want to transfer all the mutual funds I have been investing in for the past 10 years to my father. Currently, he is a nominee in most of them. How do I transfer these without any tax implications as the gains for these would be substantial?

Amit Maheshwari Tax Partner, AKM Global: As per Section 47 of the Income-tax Act, 1961, any capital asset transferred as a gift shall not be considered a transfer.

Amid spiralling gold prices, some of the jewellers have played around with accounting rules to suppress profits and pay lower tax.

The income tax (I-T) department has spotted a few units which violated regulations by changing the way they value their inventories-a trick that let them record lower profits, sources told ET. This, they said, has been going on for the past five to six years. Indeed, one of the jewellery houses has forked out close to Rs 100 crore tax on the suppressed earnings.

These jewellers are found to have switched the valuation strategy from FIFO (first-in-first-out) to LIFO (last-in-first-out) to lower the valuation of closing stock, comprising unused gold purchased as raw material, semi-finished products and unsold, finished jewellery. A closing stock value directly impacts profits-lower stock means lower profits and therefore lower tax.

The Income Tax Department has now enabled utilities for filing updated income tax returns (ITR-U) in ITR-1 and ITR-2 for the assessment years (AY) 2021-22 and 2022-23 as per Finance Act, 2025.

Union Budget 2025 announced that taxpayers will now have up to 48 months from the end of the relevant assessment year to file an updated return under Section 139 (8A) of the Income Tax Act. This extended time allows individuals to fix errors or omissions in their previous filings by paying more taxes, even if they did not submit a return or filed it incorrectly. However, there are some limits and restrictions on who can file an updated income tax return and when.

What is an Updated Income Tax Return (ITR-U)?
ITR-U provides an opportunity for voluntary compliance to taxpayers in order to rectify errors/ omissions with an objective to reduce litigation.

Finally, after 121 days into the new financial year, the Income Tax Department has enabled online filing of Income Tax Return form number 3 (ITR-3).

Excel utility of ITR Form 3 for AY 2025-26 was released on July 11, after 100 days had passed since the start of the ITR filing season.

Now that both online and offline utilities have been released by the tax department for ITR-3, taxpayers with business income, income from share trading (such as futures and options), or those who even have investments in unlisted shares can now file their income tax returns online on the e-filing portal of the Income Tax Department.

Who is eligible to file ITR-3
Individuals and Hindu Undivided Family (HUFs) are eligible to file ITR-3 if income is earned from business or profession. ITR-3 filing is applicable when there is income from business or profession (both tax audit and non-tax audit cases presumptive taxation is not opted).

The Central Board of Direct Taxes (CBDT) has relaxed the time limit for processing income tax returns filed electronically that were incorrectly invalidated by the CPC-Bengaluru due to technical reasons.

The CBDT, in circular issued Monday, directed that returns of income filed electronically up to March 31, 2024, which were erroneously invalidated, shall now be processed and intimations of these returns shall be sent to the assessees by March 31, 2026.

The decision will enable assessees to receive refunds along with applicable interest. However, refunds will not be made if PAN-Aadhaar linkage is not found, as per existing guidelines.

It seems that long waits and weeks of uncertainty after filing income tax returns (ITRs) have become the thing of the past, at least for many individual taxpayers. This year, many taxpayers are receiving their income tax refunds within mere hours of e-filing their income tax returns.

This is a major shift from past years, where refunds used to take more than 90 days. In the current assessment year (AY 2025-26), some taxpayers have received their tax refunds in their bank accounts within 4 hours of filing their return. One might recall the time some 12-13 years ago when this refund used to take more than 90 days to come. Now, thanks to fast digital processes, this time is getting reduced to hours.

Refund came in a few hours! Taxpayers’ experience
One media professional, Arun Prakash from Noida, received his tax refund within 4 hours of submitting ITR on the e-filing portal of the Income Tax Department. He says, “I filed my return using ITR Form 1 at around 5.03 pm, and by 9.02 pm on the same day, the refund came in my bank account.” He shared with us timestamped proof of both the ITR submission and the refund credit to back his claim. Below are screenshots of the confirmation messages showing the exact filing and refund times.

Filing your income tax return (ITR) may soon become more easier. The Select Committee submitted a report to Parliament, recommending major changes that may improve the annual tax filing experience.

The committee submitted its report to Parliament on 21 July. It’s over 4,500 pages long and includes 285 suggestions to improve the draft New Income Tax Bill, 2025, which is meant to replace the old 1961 Act. Among the many proposals, a few stand out that could directly benefit ordinary taxpayers. Here are three major changes being considered:
NO PENALTY IF YOU’RE FILING JUST FOR REFUND
At present, if you miss the ITR deadline, even if you’re filing just to get a refund, you may be charged a penalty of up to Rs 1,000.

But the committee has recommended a welcome change. If your total income is below the taxable limit and you're filing only to claim a refund, you should not be penalised for missing the deadline.

This move is aimed at small taxpayers and salaried individuals who often file returns just to claim a refund but end up paying fines. It could offer relief to lakhs of people and make the system fairer.

Why you need to claim Form 10E when you receive salary arrears
If you have received a salary hike or promotion with arrears—salary that should have been paid in the previous years—it can inflate your taxable income in the year you receive it. Unless you can claim tax relief, you may end up paying more tax than necessary. Enter Form 10E. It assists you in reducing your taxation by allowing you to claim relief under Section 89(1) of the Income Tax Act for advance or excess income.

How it reduces your tax burden
Tax in India is calculated through a slab system that is progressive in nature. If you are getting arrears for one year, your total income will go up—maybe pushing you into a higher tax slab than usual. But you did not earn the whole income in the said year. Form 10E allows the Income Tax Department to adjust the arrears to the years it was actually due in. This helps you to get relief from the additional tax due to bunching of income.

The central government is continuously working to simplify and streamline the tax system, aiming to reduce disputes. In this direction, Union Finance Minister Nirmala Sitharaman has reportedly given strict instructions to the Central Board of Direct Taxes (CBDT) to identify all departmental tax appeals involving amounts less than the “revised monetary limit announced by the Central Government in Budget 2024-25” and withdraw them within three months.

This move is part of a comprehensive initiative to enhance the efficiency of tax administration, reduce the legal burden on taxpayers, and alleviate the judicial system of unnecessary disputes.

“Good policies are not enough in themselves, the real meaning lies in their timely implementation,” the Finance Minister said while addressing senior tax officials during the 166th Income Tax Day celebrations on July 24.

The new Income-Tax Bill aims to simplify the language and structure of India’s tax law without altering its core policy framework, according to Lok Sabha MP Baijayant Panda. He noted that the existing Income Tax Act, 1961—now over six decades old and amended thousands of times—had become overly complex, even for experts, leading to frequent disputes and confusion.

The new Income-Tax Bill seeks to simplify language and structure without changing existing tax policies, said Lok Sabha MP Baijayant Panda, who chaired the 31-member select committee that reviewed the draft. In an interview with Business Standard, he clarified that the proposed legislation does not override the intent of the Income Tax Act, 1961, but modernises it to reduce complexity, litigation, and confusion for taxpayers.

Finance minister Nirmala Sitharaman on Wednesday said delays in the issuance of ‘order giving effect or OGE’ to taxpayers by the income tax department for execution of grievance disposal orders are ‘unpardonable’ and may risk losing taxpayers’ trust.

Finance Minister
Addressing the Income Tax Day here, she commended the work done by the department to draft the simplified, concise and easy-to-understand ‘Income Tax Bill 2025’, which will replace the complex Income Tax Act 1961. The minister appreciated the suggestions made by the Lok Sabha Select Committee and said those will be considered. She said the Bill will likely be approved by the Parliament in the current year.

She highlighted five key operational priorities from a 2025 meeting that the department has to execute: accelerating tax demand disposal, withdrawing appeals below a threshold, timely tax refunds, analysing grievances and region-wise performance reviews.

The Income Tax department is working to give shape to the rules, forms and procedures for the new Income Tax Bill, 2025, which aims to simplify the six-decade old direct tax law.

Speaking at the 166th Income Tax Day event here, Central Board of Direct Taxes (CBDT) Chief Ravi Agarwal also said the department is following the principle of 'enforcement with empathy', wherein it is enabling taxpayers to review and voluntarily update their finances.

Agarwal said "work is already underway to give shape to its rules, forms, and procedures, a critical next step... These will define how the law functions and practice. And I am confident that just like the bill, these too would reflect our shared commitment to clarity, simplicity, and taxpayer convenience".


The new Income Tax Bill, 2025, was introduced in Parliament on February 13, 2025, and was referred to a parliamentary panel. The panel was submitted its report to Parliament on July 21 suggesting some changes to the I-T bill.

The Income Tax Department has stepped up its monitoring and compliance efforts by harnessing the power of artificial intelligence (AI) to track online taxpayer behaviour and identify inconsistencies in returns, reports Indian Express. According to Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal, the department is analysing online activity, financial transactions, and return-filing patterns to nudge taxpayers towards better compliance.

AIS portal
One of the key behavioural insights comes from how often users access the Annual Information Statement (AIS) online. On average, taxpayers visited the portal 3.5 times, amounting to 24 crore visits in total. However, only 9 crore tax returns were filed last year, despite 40 crore AIS documents being generated from over 650 crore financial transactions.