Income Tax Filing Rules Change: The current practice of calling financial year and assessment year under tax laws will be changed and it will be defined as tax year.
Income Tax Filing Rules: It may be very easy for taxpayers to file income tax return in the coming days. The central government is preparing to make the income tax return filing rules very easy and simple. The government is very worried about the increasing tax disputes and tax cases worth about $ 120 billion are in the circle of disputes. The Central Board of Direct Taxes i.e. CBDT has also constituted an internal committee to review the Income Tax Act 1961.
Draft report will be issued for public consultation
According to Bloomberg report, the CBDT committee is continuously discussing to review the proposed Income Tax Act 1961 Act and it is believed that the draft report can be issued for public consultation by mid-January 2025. People familiar with the matter told Bloomberg on conditions of anonymity that the information has not yet been made public and the government may release the proposed bill in the budget to be presented on February 1, 2025.
The language of the Income Tax Act will be simplified
According to the report, along with simplifying the language of the Income Tax Act, the information related to formulas and tables can be rationalized, but there will be no mention of tax rates and policy. The Finance Ministry has not responded to the email sent on this news.
Government troubled by tax disputes
The Government of India has been modernizing its tax laws for decades to reduce the bureaucratic burden on taxpayers and for better compliance. Despite this, the cases related to tax disputes have doubled to Rs 10.5 lakh crore i.e. $ 123 billion. While presenting the budget for the financial year 2024-25 in July, Finance Minister Nirmala Sitharaman had announced a comprehensive review of the income tax laws within six months and assured to make it taxpayer-friendly.
Tax year instead of assessment year
The possible changes that are expected in the Income Tax Act will replace complex income commutation structures with formulas. The current practice of calling financial year and assessment year under tax laws will be changed and it will be defined as tax year. It will be explained through tabular format so that taxpayers can understand it easily. Apart from this, the number of additional forms for filing tax returns will be reduced.
Taxpayers do not need a CA
Earlier, on Income Tax Day, the Finance Minister had advised the officials that they need to be faceless, fair and friendly with the taxpayers. He had asked to make the language of the notice sent by the department to the taxpayers simple and non-technical so that the taxpayers can easily understand and they do not have to hire a lawyer to answer the tax department. The Finance Minister said that we should talk to our taxpayers in very simple language.
