New Delhi, Aug. 9 -- The government has withdrawn the Income-Tax Bill that was introduced in the Lok Sabha on February 13 to introduce a new version of the legislation on Monday, which will incorporate "most of the recommendations" proposed by the Select Committee of Parliament that reviewed it, an official said. The official, who did not wish to be named, added that the Income-Tax Bill, 2025 has been withdrawn "to avoid confusion by multiple versions of the Bill and to provide a clear and updated version with all changes incorporated". The new version of the Bill will be introduced for the consideration of the House on Monday, he added. To be sure, this is standard practice in the case of bills where several changes have been made. The Income Tax Bill aims to simplify the language of the current law and remove obsolete provisions, he said. Union finance minister Nirmala Sitharaman on February 13 introduced the Bill in Lok Sabha and referred it to a Select Committee. The speaker constituted the committee on February 14 under the chairmanship of BJP lawmaker Baijayant Panda. The 31-member panel submitted a 4,584-page report on July 21 with 566 observations. "I'm confident that the final draft of the bill will make the income tax law far easier to understand and comply with, and reduce disputes and litigation. It will contribute significantly to Prime Minister Modi's vision of Viksit Bharat," Panda said. Subsequent to its introduction in the Lok Sabha on Monday, the new bill will be debated in Parliament. After it is passed in Parliament and enacted post Presidential approval, it will replace the existing Income-Tax Act, 1961. The new Act is expected to be enforced from April 1, 2026, a second official said. The Bill does not make any changes in tax rates, offences and penalties. The committee has also restricted its suggestions to the scope of the bill, added the second official, who too asked not to be named. The panel recommended that the new law should give more flexibility to small taxpayers -those with an income below the taxable threshold but whose tax is still deducted at the source - from mandatorily filing income-tax returns (ITRs) to claim refunds. The committee observed that the current mandatory requirement to file a return solely for the purpose of claiming a refund could inadvertently lead to prosecution, particularly for small taxpayers whose income falls below the taxable threshold but from whom tax has been deducted at source. In such scenarios, the law should not compel a return merely to avoid penal provisions for non-filing, it said. According to experts, such taxpayers can claim refunds through Form 26AS, a consolidated statement on tax deducted and collected at source. While the committee restricted its task to simplification, it also proposed to exempt anonymous donations made to religious charities from taxation. The committee recognised "significant confusion" among non-profit organisations (NPOs) especially those with mixed charitable and religious objectives, over provisions that apply to either wholly charitable or wholly religious trusts. Recommending a 30% tax on anonymous donations for all NPOs in a departure from the current law, the committee said exempting only those that are wholly religious is unfair on India's hybrid NPO sector. The panel's voluminous report, adopted last month after 36 rigorous meetings and clause-by-clause examination of the Bill, also added more accountability to the controversial clause that empowers income-tax (I-T) officials to access computers and other digital devices. The panel, according to functionaries, has suggested that during such a search or seizure, the valuer involved must be approved only by top ranking I-T officials. One of the significant features of the Bill is the specific use of the term "digital" to underscore the growing importance of digitalisation in tax administration, record-keeping and digital transactions, including virtual digital assets (VDAs) such as cryptocurrencies....