Finance ministry invites public feedback for review of Income Tax Act
Source: Business Standard
The finance ministry on Monday invited public input and suggestions for the proposed comprehensive review of the Income Tax Act. The comments were sought in four categories: simplification of language, litigation reduction, compliance reduction, and redundant/obsolete provisions.
The Central Board of Direct Taxes (CBDT), under the finance ministry, also set up an internal committee to oversee the comprehensive review of the Act. “The goal is to make the Act concise, clear, and easy to understand, which will reduce disputes, litigation, and provide greater tax certainty to taxpayers,” the finance ministry said in a statement.
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However, it did not reveal details about the committee. On August 30, Business Standard reported that the revenue department in the finance ministry has formed a panel headed by V K Gupta, chief commissioner of income tax (I-T), to simplify the decades-old I-T Act.
Finance minister Nirmala Sitharaman, in her FY25 Budget speech, announced a review of the Income Tax Act.
“It has been our endeavour to simplify taxation. We have taken a number of measures in the last few years, including the introduction of simplified tax regimes without exemptions and deductions for corporate tax and personal income tax. This has been appreciated by taxpayers. Fifty-eight per cent of corporate tax came from the simplified tax regime in financial year 2022-23. Similarly, as per data available till now for the last fiscal, more than two-thirds have availed the new personal income tax regime,” she said.
“Suggestions should specify the relevant provision of the Income-tax Act, 1961, or Income-tax Rules, 1962 (mentioning the specific section, sub-section, clause, rule, sub-rule, or form number), as the case may be, to which the suggestion relates under the aforementioned four categories,” said the finance ministry statement.
Tax experts said that the government’s initiative to seek upfront public consultation in the process leading up to drafting of new income tax legislation underpins the transparency in tax policymaking.
“Not only is this an unprecedented opportunity for businesses to participate in evolving the tax legislation that will govern them in future, but it will also provide policymakers with adequate breadth in their formulation approach. The impending tax legislation will be an important pillar of India’s aspirational macro-economic future, and it is essential that the process deployed in developing this legislation is thorough, transparent, and worthy,” said Sumit Singhania, partner, Deloitte India.
Maneesh Bawa, partner at Nangia Andersen India, said: “This crowdsourced approach aims to address the practical challenges faced by taxpayers, accountants, and legal professionals, ensuring that their real-world experiences help shape the reforms.”
First Published: Oct 07 2024 | 8:54 PM IST
