Income Tax Bill 2025: CA Shares ‘Why The Middle Class Should Pay Attention'

The Lok Sabha passed the revised Income Tax (No. 2) Bill, 2025, on Aug. 11. The new legislation will replace the Income Tax Act of 1961. Presented by Finance Minister Nirmala Sitharaman, the new bill introduced amendments to the I-T Act, 1961 and the Finance Act 2025. The new legislation seeks to modernise and simplify the country’s tax system. Chartered accountant and tax expert Nitin Kaushik, in a recent X post, highlighted why this is particularly important for the middle class, which carries a huge tax load and yet often struggles with the complexities of filing returns.

In a detailed thread on X (formerly Twitter), Kaushik said, “The story began on 13 Feb 2025, when a new Income Tax Bill was tabled in Lok Sabha to replace the 1961 Act. But on Aug. 8, it was suddenly withdrawn. Why? Multiple versions, multiple drafts, and confusion in Parliament.”

The Parliamentary Select Committee, led by BJP MP Baijayant Panda, had suggested over 285 recommendations to the old draft of the Income Tax Bill 2025. Consequently, the old draft was replaced with a new revised draft. This paved the way for “an updated, simplified version of the earlier draft — with several key recommendations included.”

For many middle-class taxpayers, income tax filing remains a daunting task. The existing system’s technicalities and jargon often force people to seek professional help, adding to the cost and inconvenience. As Kaushik highlights in his post, “Complex rules mean most taxpayers need intermediaries to file returns.”

The new bill aims to simplify the process, making tax compliance more accessible and less time-consuming.

Kaushik highlighted the major changes introduced in the bill, writing, “Tax refunds flexibility: Even if you file ITR late, you can claim refunds. Intercorporate Dividend Deduction (Section 80M) benefits expanded. Special corporate tax rate (115BAA) benefits extended. NIL TDS certificate available for those with no tax liability.”

As such, one of the bill’s main goals is to streamline procedures so that taxpayers can become more self-reliant. This means fewer complications and more transparency in how taxes are filed and refunds processed.

According to Kaushik, the select committee’s recommendations aim to make the tax laws more accessible and user-friendly for middle-class taxpayers by focusing on “language simplification, correcting cross-references, aligning phrases” to ensure clearer and more readable provisions. These changes are meant to benefit taxpayers, especially those in the middle-class bracket, through “quicker refunds, clearer deductions, and smoother compliance,” thereby making the entire tax filing process less complicated and more efficient.

While the middle class will experience direct benefits in terms of ease and clarity, businesses will also gain from clearer dividend tax rules and incentives.

If you belong to the middle class and have ever felt overwhelmed by the tax filing process, the Income Tax Bill 2025 promises relief. Simplified rules, easier refund claims and clearer communication will empower you to handle your taxes without unnecessary stress or additional expenses.