The government is preparing to introduce a new Income Tax Bill aimed at simplifying tax laws and improving compliance. The bill is expected to use clear language to help taxpayers understand their obligations and rights.
Union Finance Minister Nirmala Sitharaman is set to present the bill this week, after which it will be referred to the Parliament’s Standing Committee on Finance for review. The proposed changes align with the government’s approach of placing trust in taxpayers before initiating scrutiny. Various stakeholders expect revisions compared to the existing income tax framework.
One of the anticipated changes is a simpler method for determining tax residency. The current system involves multiple conditions to qualify an individual as a tax resident. The bill is also expected to eliminate outdated provisions to reduce the overall complexity of tax regulations.
While the bill does not propose new taxes, it focuses on making tax compliance easier. It may also allow tax reliefs or amendments without waiting for the annual budget, enabling the government to implement changes through executive orders.
The proposal includes measures to limit scrutiny to cases of gross non-compliance, reducing unnecessary interactions between taxpayers and authorities. This is expected to lower litigation and make compliance more straightforward.
The ongoing review of the Income-tax Act, 1961, aims to modernize India’s tax system in line with economic objectives. It seeks to improve business operations, provide clarity in interpretations, and enhance tax administration. These reforms are expected to increase the tax-GDP ratio and support economic growth.
Sandeep Chaufla, Partner at Price Waterhouse and Co (PwC), said that the bill is part of a broader effort to streamline tax processes and improve efficiency.
-IANS
