Like the last few years, this time too the government will announce simplification of income tax rules in the Union Budget. Last year the government made major changes in the rules of capital gains tax. An attempt was made to make the new income tax regime attractive. This effort is expected to continue in the budget this time too.
Like the last few years, in the Union Budget 2025, the government’s focus may be on simplifying the income tax rules. The government wants to gradually make changes in the Income Tax Act. The government has already made major changes in the rules of capital gains tax and withholding tax. The government has also introduced a new income tax regime without deduction. In the Union Budget to be presented on February 1, taxpayers can expect such changes in the income tax rules, which may reduce their interest in the old regime.
Change in slabs in the new regime
Finance Minister Nirmala Sitharaman can change the tax slabs / rates in the new tax regime. She can keep the old regime as it is. She can also decide to abolish it. The current rule of levying tax on the third property on the basis of notional rent can be abolished, as property tax is already in force. Apart from this, there is no standard for determining notional rent and it is a very complicated process. Therefore, the government can eliminate this burden of additional tax on the taxpayer.
Ways to reduce paperwork
Due to complex tax rules, both time and money of taxpayers are wasted. They have to do many types of paperwork. They have to understand complex tax provisions. In some cases, even the services of a tax consultant have to be taken. Currently, there is a lot of workload on the income tax authorities. They have to verify the claims and tax filing of taxpayers. They have to keep track of assessments, demands, refunds, etc. This process of compliance proves to be very expensive, because tax collection is less in comparison to this.
Easy rules for NRIs
The government can also simplify the tax rules for NRIs. Currently, in case the landlord is an NRI, the tenant has to take TAN. A separate form has to be filled. A separate login has to be created. If the landlord is not an NRI, then the tenant can directly file withholding tax returns and pay tax online from his e-filing account. Similarly, the government can eliminate the 30-day ITR-V verification requirement for non-residents who do not have Aadhaar in India and those who live abroad. This is also important because many countries have summer holidays in August.
Increased use of technology
The use of Artificial Intelligence (AI) and other technologies can be increased to simplify income tax rules. Since the government has increased the use of technology in income tax processes, it has become much easier. AIS, TIS have helped a lot. The government can announce increased use of technology in income tax processes in the Union Budget.
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