The Lok Sabha on Monday passed the Taxation Laws (Amendment) Bill, 2025, amid vocal opposition and procedural din.
The bill, introduced by Finance Minister Nirmala Sitharaman, aims to extend tax exemptions to subscribers of the Unified Pension Scheme (UPS), aligning it with benefits previously available under the New Pension Scheme (NPS).
The amendment also revises provisions related to block assessment in Income Tax search cases, streamlining investigative procedures and compliance. Notably, the bill includes direct tax benefits for public investment funds from Saudi Arabia, signalling a strategic push to attract foreign capital.
Last Friday, the government officially withdrew the old Income Tax Bill, paving the way for a more streamlined and contemporary framework. This move follows the comprehensive recommendations made by the Parliamentary Select Committee, which were all accepted in full. The committee, chaired by Baijayant Panda, had meticulously reviewed the bill and proposed 285 amendments aimed at refining and simplifying the tax structure. The newly introduced Income Tax Bill reflects these suggestions and is designed to make the tax system more accessible and transparent for citizens. With this reform, the government signals its commitment to modernisation and ease of compliance in financial governance
The Unified Pension Scheme, implemented from April 1, 2025, is now set to enjoy full parity with NPS in terms of tax treatment, a move expected to boost adoption among salaried and informal sector workers.
The bill amends both the Income-tax Act, 1961 and the Finance Act, 2025, reflecting the government’s broader agenda of pension reform and international investment facilitation.
