Income Tax Act Simplification: Govt to Invite Suggestions from Industry

Govt. proposed inviting recommendations on the Income Tax Act of 1961 from the private sector and tax experts beginning in October.

Inviting Suggestions on Review of Income Tax Act from Industry

Reetu | Oct 1, 2024 |

Income Tax Act Simplification: Govt to Invite Suggestions from Industry

Income Tax Act Simplification: Govt to Invite Suggestions from Industry

The government has proposed inviting recommendations on the Income Tax Act of 1961 from the private sector and tax experts beginning in October as part of an effort to streamline the direct tax law, sources said.

In a meeting with industry chambers earlier this month, the government stated that a feature will be added to the Income Tax portal to allow input on various sections of the Income Tax Act with the goal of simplifying the language and minimizing litigation.

Following the Budget announcement, the Central Board of Direct Taxes (CBDT) formed an internal committee to conduct a thorough study of the six-decade-old direct tax law and make it simpler, logical, and easier to read and understand.

“In the meeting with industry associations, the revenue department suggested that the functionality be built by the first week of October to give suggestions for revising the income tax law,” according to a source.

Government to invite Suggestions on Review of Income Tax Act from Industry next month

“Just by eliminating the outdated clauses, the number of pages may be reduced by approximately 100. “The goal of the IT law review is to simplify language and reduce litigation,” the source noted.

Finance Minister Nirmala Sitharaman indicated concluding the Income Tax law review in six months in the 2024-25 Budget, which was presented in July.

Given that the six-month deadline expires in January, it is widely believed that the amended IT Act will be introduced in the Budget session of Parliament.

Another source stated that while no new changes are expected to the statute, an amended Act might also be included in the Finance Bill of 2025.

“It could be that the revenue department is looking at incorporating the amendments suggested by the industry in the first draft and then put the amended draft law in the public domain,” a source told me.

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