New Delhi, July 22 -- A parliamentary panel on Monday suggested that the government make income-tax rebate provisions unambiguous and spare small taxpayers from mandatorily filing returns to claim refunds, even as some dissenting voices and experts criticised its report as a lost opportunity for making transformational changes. Member of Parliament Baijayant Panda, who is also the chairperson of the 31-member select committee of the Lok Sabha on Monday presented the report on the Income-Tax Bill, 2025 to the House, an official statement said. The Bill was introduced in the Lok Sabha on February 13 by finance minister Nirmala Sitharaman. After enactment it will replace the existing Income-Tax Act, 1961. While the committee restricted its task to clause-wise simplification, it also proposed to exempt anonymous donations made to religious-cum-charitable trusts from taxation. The committee recognised "significant confusion" among Non-Profit Organisations (NPOs), especially those with mixed charitable and religious objectives, regarding the interpretation of wholly for charitable or religious purposes, the report said. "This ambiguity could lead to uncertainty for existing trusts and those established after 1961, increasing litigation risks," it said, asking the government to redraft the clause suitably. Pointing at imposing a 30% tax on anonymous donations for all NPOs in a departure from the current law, the committee said exempting only those wholly religious has omitted "religious-cum-charitable" trust, a significant category previously exempt. To prevent undue burden and support India's hybrid NPO sector, the committee strongly recommended reintroducing a suitable provision. In order to protect small taxpayers from compliance burden, the panel proposed that an assessee, otherwise not required to file an income-tax return (ITR), should not be mandatorily asked to file a return to claim a refund, Hindustan Times reported on Saturday. "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. Rohinton Sidhwa, partner at Deloitte India, said the larger set of amendments proposed by the panel is "corrective and meant to fix errors" in drafting. Interestingly there have been a few changes, he said. "An amendment reinstating the deduction in respect of inter-corporate dividends - Clause 200 corresponding to section 115BAA. The reference to inter-corporate deduction is now made which was absent in the original draft. This is a beneficial change and reduces the tax cost of distributing profits to shareholders," he added. The comprehensive report reflects the immense effort towards wide stakeholder consultation for simplification of the law, Sameer Gupta, partner and national tax leader at EY India said. "A few inconsistencies appear to remain and may require further attention. For instance, the Bill does not currently clarify the withholding obligations for payments made by non-residents without a taxable presence in India. Similarly, the formula introduced in the last Budget for computing presumptive income of non-residents providing services or technology for electronic manufacturing may need refinement to address potential anomalies," he said. While government officials and experts commended the committee's thorough and timely report, some of the members in the committee criticized that the legislation could have brought significant taxation reforms, but it chose to propose simplification of language of the existing law. The report records dissents of three such members - Lok Sabha MPs Amar Singh (Congress), Shashank Mani (BJP) and NK Premachandran (RSP). "A paradigm shift was felt the need of the hour," Premachandran's dissent letter said, referring to transformation in economic activities because of digital technology and global taxation regimes. "Overhaul at the policy level was required. The Government eulogizes that the new law would go by the mantra of 'trust first and scrutinize later'. The public trust can be won only if the promised change is transformational. The exercise of the new Income-Tax Bill could woefully fail if it merely remains as a reformatting or semantic glorification of the law," he said....