{"id":51264,"date":"2025-08-13T20:44:50","date_gmt":"2025-08-13T15:14:50","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=51264"},"modified":"2025-08-14T19:29:45","modified_gmt":"2025-08-14T13:59:45","slug":"lok-sabha-passes-income-tax-no-2-taxation-laws-amendment-bills","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/13-08-2025\/lok-sabha-passes-income-tax-no-2-taxation-laws-amendment-bills","title":{"rendered":"Lok Sabha Passes Income Tax (No. 2) and Taxation Laws (Amendment) Bills"},"content":{"rendered":"\n<p><strong>Syllabus: GS2\/ Polity and Governance<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Lok Sabha has passed the Taxation Laws (Amendment) Bill, 2025 and the Income-Tax (No.2) Bill, 2025.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About The Income-Tax (No.2) Bill, 2025<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Bill <strong>seeks to replace the Income-tax Act, 1961. <\/strong>It simplifies tax language, clarifies deductions, and strengthens cross-referencing across provisions.\u00a0<\/li>\n\n\n\n<li>Tax rates and regimes for individuals and corporations remain unchanged. There are no changes in offences and penalties.<\/li>\n\n\n\n<li><strong>Power to Frame Schemes: <\/strong>The Act provided specific provisions for a faceless mechanism in areas such as\u00a0 inquiries, valuations, revision of orders, and tax recovery.\n<ul class=\"wp-block-list\">\n<li><strong>New Change:<\/strong> The Bill grants general powers to the central government to frame schemes for; Eliminating interface with taxpayers via technology and Optimising resource use through economies of scale and functional specialisation.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Virtual digital space: <\/strong>The Act allows income tax authorities to enter and search buildings and break open locks.\u00a0 The Act also empowers the authorities to inspect electronic documents.\n<ul class=\"wp-block-list\">\n<li><strong>New Change: <\/strong>Authorities can now also gain access to virtual digital spaces, including by overriding access codes, during search and seizure operations.<\/li>\n\n\n\n<li><strong>The Bill defines virtual digital space<\/strong> as an environment, area, or realm that is constructed and experienced through computer technology.\u00a0 It includes email servers, social media accounts, online investment and trading accounts, and websites for storing details of asset ownership.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Interpretation of tax treaties:<\/strong>\u00a0 The Act allows the central government to enter into agreements with other countries to provide relief in cases of double taxation.\n<ul class=\"wp-block-list\">\n<li><strong>The Bill retains these provisions <\/strong>and adds that if a term is not defined in the treaty, the Act, or a notification by the central government, its meaning will be as assigned in any other central law.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Dispute resolution panel: <\/strong>\u00a0The Act allows certain eligible assessees to refer draft orders passed by assessing officers to a dispute resolution panel.\n<ul class=\"wp-block-list\">\n<li><strong>The Bill retains these provisions<\/strong> and adds that the panel must issue directions along with the points of determination and the reasons for arriving at the decision.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The Taxation Laws (Amendment) Bill, 2025<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Bill seeks to amend the <strong>Income-Tax Act, 1961 <\/strong>and the <strong>Finance Act, 2025<\/strong>.\u00a0 The 1961 Act provides for the framework to levy income tax on individuals and companies.<\/li>\n\n\n\n<li><strong>Exemptions for the Unified Pension Scheme: <\/strong>The 1961 Act specifies income categories which are exempt from income tax. The Bill adds exemptions for;\n<ul class=\"wp-block-list\">\n<li>payments under the Unified Pension Scheme (UPS) upon superannuation, voluntary retirement, or retirement (up to 60% of the pension corpus), and\u00a0<\/li>\n\n\n\n<li>lump sum amounts received under UPS.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>The transfers<\/strong> from individual corpus to pool corpus will <strong>not be treated as income<\/strong> and will not be taxed.<\/li>\n\n\n\n<li><strong>Saudi Arabia Public Investment Fund (PIF) Exemption:<\/strong> Tax exemption extended to PIF of Saudi Arabia and its wholly owned subsidiaries investing funds of the Saudi government in India.<\/li>\n\n\n\n<li><strong>Block assessment in search cases:<\/strong>\u00a0 The 1961 Act specifies a procedure for the assessment of total undisclosed income as a result of a search. It provides for assessment for a block period.\n<ul class=\"wp-block-list\">\n<li><strong>The Bill adds<\/strong> that if a notice for such an assessment is issued after a search has begun but before the search is completed, that assessment will stop on the date of the notice.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/ddnews.gov.in\/en\/lok-sabha-passes-income-tax-and-taxation-laws-amendment-bills-amid-opposition-protests\/#:~:text=The%20Income-Tax%20Bill%2C%2020\" rel=\"nofollow noopener\" target=\"_blank\"><strong>DD News<\/strong><\/a>, <a href=\"https:\/\/prsindia.org\/billtrack\/the-taxation-laws-amendment-bill-2025\" target=\"_blank\" rel=\"noopener\"><strong>PRS<\/strong><\/a><strong>, <\/strong><a href=\"https:\/\/prsindia.org\/billtrack\/the-income-tax-no2-bill-2025\" rel=\"nofollow noopener\" target=\"_blank\"><strong>PRS<\/strong><\/a><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<h3><strong>Context<\/strong><\/h3>\n<li class=\"ms-5\">The Lok Sabha has passed the Taxation Laws (Amendment) Bill, 2025 and the Income-Tax (No.2) Bill, 2025.<\/li>\n<p><\/p>\n<h3><strong>About The Income-Tax (No.2) Bill, 2025<\/strong><\/h3>\n<li class=\"ms-5\">The Bill seeks to replace the Income-tax Act, 1961. It simplifies tax language, clarifies deductions, and strengthens cross-referencing across provisions.\u00a0<\/li>\n<li class=\"ms-5\">Tax rates and regimes for individuals and corporations remain unchanged. There are no changes in offences and penalties.<\/li>\n<li class=\"ms-5\">Power to Frame Schemes: The Act provided specific provisions for a faceless mechanism in areas such as\u00a0 inquiries, valuations, revision of orders, and tax recovery.<\/li>\n<li class=\"ms-5\">New Change: The Bill grants general powers to the central government to frame schemes for; Eliminating interface with taxpayers via technology and Optimising resource use through economies of scale and functional specialisation.<\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/13-08-2025\/lok-sabha-passes-income-tax-no-2-taxation-laws-amendment-bills\" class=\"btn btn-primary btn-sm float-end\">Read\u00a0More<\/a><\/p>\n","protected":false},"author":15,"featured_media":51440,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-51264","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/08\/income-tax-no-2-taxation-laws-amendment.png","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/51264","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=51264"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/51264\/revisions"}],"predecessor-version":[{"id":51300,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/51264\/revisions\/51300"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media\/51440"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=51264"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=51264"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=51264"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}