New Delhi: Union Finance and Corporate Affairs Minister Nirmala Sitharaman on Tuesday announced that the new Income Tax Bill will be taken up for discussion during the Monsoon Session of Parliament. Speaking extensively about the Finance Bill 2025 in Parliament today, Finance Minister Sitharaman emphasized that the bill provides unprecedented tax relief to honor taxpayers.
The new Income Tax Bill, tabled in Lok Sabha by Sitharaman on February 13, aims to replace the existing Income Tax Act of 1961 and introduce reforms affecting various taxpayer categories, including individuals, businesses, and non-profit organizations. As part of the July 2024 Budget, the government proposed a comprehensive review of the Income Tax Act of 1961 to make it more concise, clear, and reduce disputes and litigation.
On March 18, the government invited stakeholders to submit their suggestions on the newly introduced Income Tax Bill 2025. The bill is currently under review by the Select Committee for detailed examination. Responding to questions on the Finance Bill 2025 today, Sitharaman reaffirmed the Union government’s commitment to providing tax certainty and streamlining business regulations as part of its broader vision to build a Viksit Bharat by 2047.
“The Budget aims to implement reforms to build Viksit Bharat by 2047. It focuses on tax certainty, ease of doing business, and includes a new Income Tax Bill, which is currently under review by a special committee. This Bill is not a part of the Finance Bill,” Sitharaman stated.
Tax and Tariff Reforms
Elaborating on tax reforms, she announced a reduction in customs tariff rates on industrial goods, cutting the number of tariff slabs from 21 to just eight. She also clarified that under direct tax provisions, either a cess or a surcharge—but not both—can be levied on an item.
“We have removed seven custom tariff rates on industrial goods, reducing the number from 21 to 8. We have ensured that no single item is subject to both cess and surcharge—only one can be levied,” said Sitharaman, speaking on direct taxes.
Exemptions on Indirect Taxes and GST Adjustments
Addressing concerns over indirect taxation, Sitharaman assured that prasadam from temples, mosques, churches, and gurdwaras will remain exempt from GST. She further mentioned that a Group of Ministers (GoM) is evaluating GST reductions on ingredients used in preparing these prasadam.
Adding further, she announced that imported drugs for rare diseases, whether for individual patients or research organizations, have been exempted from Integrated GST (IGST).
Customs And Trade Policies
Highlighting the Customs proposal, Sitharaman said that the government aims to rationalize tariff structures and address duty inversion, ensuring a more balanced and competitive trade environment. “These reforms will support domestic manufacturing, enhance value addition, boost exports, facilitate trade, and provide relief to the common people,” she added.
She further emphasized, “In Budget 2025, we aim to boost domestic production and enhance export competitiveness by reducing duties on raw materials and inputs, making domestic products more cost-effective.”
