New Income Tax Bill 2025: The Parliamentary Committee on the New Income Tax Bill 2025 has presented its report in the Lok Sabha. In this report, the committee has given 32 important suggestions. These include the important recommendation that those who file income tax returns (Late ITR Filing) after the deadline should also get a refund of TDS without any penalty. Along with this, it has also been suggested that anonymous donations given to trusts that do both religious and social work should not be taxed.
The report expresses concern about non-profit organizations
This report has been prepared by a committee led by BJP MP Baijayant Panda. Income Tax Bill 2025 is going to replace the old Income Tax Act 1961. Therefore, the committee has reviewed it in depth and given many suggestions to the government.
The report has expressed particular concern about those non-profit organizations (NPOs) that perform religious functions as well as social service. The committee says that it would not be appropriate to tax the anonymous donations received by these organizations.
It is not right to tax the entire income of NPO
The committee believes that taxing the entire donation received by a non-profit organization is against the principle of ‘tax on real income’ of the Income Tax Act. The committee suggests that only the “net income” of such organizations, i.e. the amount left after deducting expenses, should be taxed.
Confusion over anonymous donation
The committee also said that there is no clarity in the provisions of the new bill regarding anonymous donations received by trusts that do both religious and social work. In the current proposed bill, only ‘purely religious trusts’ have been exempted from anonymous donations. But the committee says that there are many such trusts that run temples as well as hospitals or schools.
In such a situation, it would not be right to give exemption only to religious trusts. The committee said that in the old law, religious-social trusts were recognised as a separate category, which has been ignored in the new bill.
The committee’s report says that although the aim of the new Income Tax Bill is to simplify the language of the law, many important things related to religious-social trusts have not been included in it. This can affect the country’s large social sector, which is dependent on the traditional donation system.
Clause 337 of the new Income Tax Bill 2025 proposes that anonymous donations received by all registered NPOs will be directly taxed at 30%. Only trusts with purely religious purposes will be exempted from this.
This proposal is completely different from Section 115BBC of the current Income Tax Act 1961. Under the current law, if an institution is formed for both religious and social purposes, and it receives anonymous donations, then it is not taxed, unless that donation is given directly to a university, hospital, or other institution.
The committee says that religious-social organizations receive most of the donations through traditional methods like donation boxes, where it is not possible to identify the donor. In such a situation, the new provision will not be able to do justice to these organizations.