New Delhi, Feb 9 The revised income tax law is expected to be clear, concise, consistent and supplemented with illustrative examples to aid understanding and interpretation by various stakeholders, which will also eliminate obsolete and redundant provisions, according to industry experts.
The ongoing review of the Income-tax Act, 1961, seeks to modernise and simplify India's tax system in line with broader economic goals.
“It aims to enhance the ease of doing business, reduce ambiguity in interpretations, improve tax administration and compliance. This will help increase India's tax-GDP ratio to global levels and support sustainable economic growth,” said Sandeep Chaufla, Partner - Price Waterhouse and Co (PwC).
The review will also foster a transparent and efficient tax system that attracts investments and advances the Government's vision of a Viksit Bharat, he mentioned.
Union Finance Minister Nirmala Sitharaman is hopeful of introducing the new Income Tax Bill in the coming week, which would go to the Parliament's Standing Committee on Finance for scrutiny.
Aiming to put more money in the hands of the middle class and simplify the whole filing process, the bill has been granted approval in the Cabinet meeting chaired by Prime Minister Narendra Modi.
According to FM Sitharaman, all the process is completed and the Parliament passes it, then the government will decide when to roll out the new bill.
The legislation would likely provide directions to widen the tax net, given the contraction in the tax base following the exemption limit being raised to Rs 12 lakh in the Union Budget.
The current Income Tax Act was enforced in the country in 1961 and now, the new Income Tax Act is being made according to the needs of the 21st century to replace the existing law.
The simplification of this bill can be understood in a way that there are about 6 lakh words in the old Income Tax Act, which will be drastically reduced to about 3 lakh in the new bill, easy for taxpayers to comprehend.
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