Finance Minister Nirmala Sitharaman is set to introduce a completely new income tax bill during the upcoming Budget session, aiming to simplify and modernize the existing tax framework. This initiative responds to the need for clearer legislation, reducing complexity, and addressing public concerns regarding the current Income Tax Act. Sources Said
The primary objective is to simplify the tax law, making it clearer and more accessible to the general public, with a goal of reducing the law’s volume by about 60%.
An internal committee has been formed to oversee the review process, with 22 specialized sub-committees examining various aspects of the Act.
The Income Tax Department has already received 6,500 suggestions from stakeholders, focusing on four major areas:
1.Identifying and eliminating redundant or obsolete provisions.
2.Simplifying the language of the tax law.
3.Reducing litigation and disputes.
Streamlining compliance for taxpayers.
The government plans to involve taxpayers and experts in the review process to ensure the new law addresses their concerns and is user-friendly.
The government acknowledges the importance of public input in shaping the new law. Initially, there were plans to release a draft for public feedback; however, the approach has shifted to a more proactive stance, allowing for adjustments based on stakeholder suggestions before finalization. This process is crucial to ensure the new law is both effective and user-friendly.
The draft law is currently in its final stages of review by the Law Ministry and is expected to be presented during the latter part of the Budget session, which runs from January 31 to April 4. The government emphasizes the need for extensive discussions with stakeholders to address potential concerns and ensure a smooth transition to the new framework.
