Revised Income Tax Law to Eliminate Obsolete Provisions: Experts
The revised income tax law aims to bring clarity, consistency, and simplicity to India's taxation system while eliminating outdated and redundant provisions, according to industry experts. The ongoing review of the Income-tax Act, 1961, seeks to modernize the law in line with India's economic goals.
"The goal is to improve the ease of doing business, eliminate ambiguity, and enhance tax administration and compliance. This will also help in improving India's tax-GDP ratio to international benchmarks and ensure sustainable economic growth", said Sandeep Chaufla, Partner at PwC. He further stated that this change would make the tax regime clearer and investment-friendly, thereby resonating with the vision of Viksit Bharat by the government.
Union Finance Minister Nirmala Sitharaman is expected to introduce the new Income Tax Bill in the coming week, following approval by the Cabinet in a meeting chaired by Prime Minister Narendra Modi. The bill will be sent to the Parliament's Standing Committee on Finance for further scrutiny before implementation.
It aims at providing more money in the pocket of the middle class and will make it less complicated for taxpayers to file returns. Once approved by the parliament, the time for implementing this tax reform is left for the government. Tax base expansion forms one of the key concerns since the exemption limit has already been raised to Rs 12 lakh under the Union Budget.
An Act to replace the existing Income-tax Act, 1961 with a structure in tune with the 21st century, has reduced the legal text from about six lakh words of the earlier law to about three lakh words in the new version and thus simplifies it a lot for taxpayers.
Experts' opinions are that the new version of the law will make compliance easier, increase revenue collection, and become more investor-friendly. A clearer tax structure will help both businesses and individuals by reducing ambiguity and increasing transparency.
