New I-T Bill corrects anomalies, allows refunds for returns filed beyond deadline
After last week’s withdrawal of the earlier version of the new Income Tax Bill, the Lok Sabha on Monday passed the updated version, the Income-Tax (No.2) Bill, 2025 and the Taxation Laws (Amendment) Bill, 2025, which amends the Income-tax Act, 1961 and the Finance Act, 2025. The government accepted most of the recommendations of the Select Committee, headed by BJP leader Baijayant Panda, and corrected several anomalies in the updated 624-page Income Tax Bill including those for LLPs and anonymous donations to religious-cum-charitable trusts.
Among the significant changes made in the Taxation Laws (Amendment) Bill, 2025 that sought to amend the Finance Act, 2025 was the inclusion of the ‘Public Investment Fund of the Government of the Kingdom of Saudi Arabia’ and its wholly-owned subsidiaries which make investment, directly or indirectly, out of the Fund in clause (23FE) of the Income-tax Act.
Income tax exemption is given at present to several sovereign wealth funds including Saudi’s Public Investment Fund, which has over $925 billion assets under management and was notified for I-T exemption in November 2022. However, the Fund had faced some restrictive norms related to investments through various subsidiaries. With this amendment, the government has granted complete income tax exemption to Saudi’s Fund by specifying its name explicitly in the Act as has been done earlier for the Abu Dhabi Investment Authority (ADIA).
Introduced in Finance Act, 2020, Clause (23FE) of section 10 of the Act provides for the exemption to specified persons from the income in the nature of dividend, interest, long-term capital gains or certain other incomes arising from an investment made by it in India. The amendments for Saudi’s Fund are significant as it may explore investment opportunities in India including a stake in the two new refineries being planned by state-run ONGC and BPCL.
