“Lok Sabha Passes Income Tax Bill 2025: No Notional Rent, Tax Year Concept Introduced & More”
This revamped Income Tax Bill passed in Lok Sabha introduces key changes: removal of notional rent on vacant commercial property, a unified Tax Year system, house property deductions clarified, faster refunds, and faceless assessments
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Lok Sabha Clears Income Tax (No. 2) Bill 2025: Key Benefits for Taxpayers
On 11 August 2025, Lok Sabha passed the revised Income Tax (No. 2) Bill 2025, a sweeping reform that aims to modernize India’s tax system by replacing the decades-old 1961 Income Tax.
5 Major Changes Taxpayers Should Know:
No Tax on Notional Rent for Vacant Commercial Property
The Select Committee recommended removing the clause that imposed notional rent on unoccupied business premises—bringing relief to property owners with idle commercial assets.
Introduction of “Tax Year” Concept
The new bill replaces the previous “Previous Year” and “Assessment Year” system with a simpler and more intuitive “Tax Year” framework, streamlining tax administration.
Clarified Deductions for House Property Income
A 30% standard deduction can now be applied after municipal taxes.
Pre-construction interest deductions are extended to both let-out and self-occupied properties—aligning with existing tax norms.
Faster Refund Claims & NIL-TDS Certificates
Taxpayers can now claim refunds even after filing deadlines, and “nil-tax” certificates can be obtained in advance by those with no tax liability.
Digital-First, Faceless Tax Compliance
The bill endorses a faceless, digital-first assessment system, reduces unnecessary sections (from 819 to 536), and consolidates payments under one unified tax year to enhance transparency and reduce corruption.
