Income Tax: In a bid to simplify direct tax laws, the government has proposed to invite suggestions from the private sector and tax experts on the Income Tax Act, 1961 from October.
Income Tax: As part of the exercise to simplify the direct tax law, the government has proposed to invite suggestions from the private sector and tax experts on the Income Tax Act, 1961 from October. Sources gave this information. In a meeting with industry chambers earlier this month, the government had said that a facility will be created in the income tax portal, in which suggestions can be given about various sections of the Income Tax Act. Its purpose is to simplify the language and reduce litigation.
After the budget announcement, the Central Board of Direct Taxes (CBDT) had constituted an internal committee to comprehensively review the six-decade-old direct tax law and make it concise, easy to read and understand. A source said, “In a meeting with industry associations, the Revenue Department suggested that this facility should be put on the portal by the first week of October to seek suggestions for re-drafting the Income Tax Act.
Another source said that this exercise is not to write a new tax law or tax code. The source said, “The number of pages can be reduced by about 100 just by removing old redundant provisions. The purpose of the review of the Income Tax Act is to simplify the language and reduce litigation.”
In the Budget 2024-25 presented in July, Finance Minister Nirmala Sitharaman had proposed that the review of the Income Tax Act would be completed in six months. Given that the six-month deadline expires in January, it is widely expected that the amended Income Tax Act may be introduced in the Budget session of Parliament. Another source said that since no new changes are expected in the law, the amended Act may also become part of the Finance Bill, 2025.
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