The Centre is yet to take a call on whether a new Direct Taxes Code should be framed or the existing income tax law will be revamped, Sanjay Malhotra, Revenue Secretary, said.
“Whether it will be a completely new Code or whether existing Income Tax Act will be revised. Both the options are open. Purpose will be to make the law simple to read,” Malhotra said at a post-Budget conference, organised by industry body Assocham in the Capital.
The review exercise would also involve consultations with stakeholders, he added.
In her Budget speech, Finance and Corporate Affairs Minister Nirmala Sitharaman had said the Government would undertake a comprehensive review of the Income Tax Act to make it easy to read.
“The purpose is to make the Act concise, lucid, easy to read and understand. This will reduce disputes and litigation, thereby providing tax certainty to the taxpayers. It will also bring down the demand embroiled in litigation. It is proposed to be completed in six months,” Sitharaman said.
Meanwhile, Malhotra on Friday also asserted that the latest rationalisation of capital gains tax in Budget should not be seen as a “revenue augmentation” effort, but be viewed as a simplification exercise.
“All of you (industry) had asked for simplification of capital gains tax regime. So the Budget has delivered on it. Simplification does not mean that tax rates will come down. Please appreciate that government needs revenues. Let’s be prepared that some rates will go up and some will come down. Simplicity has its own virtues,” Malhotra added.
Malhotra also said the proposed insertion of Section 11A in Central GST Act is aimed at removing ambiguities and must be invoked only in exceptional cases and not resorted to as the norm.
Based on the recommendations of the 53rd GST Council Meeting, the Centre had, in the Budget, introduced this section to grant the government the power to regularise instances of non-levy or short-levy of GST due to prevailing general trade practices.
Ravi Agrawal, Chairman, Central Board of Direct Taxes, (CBDT), said, “The provisions introduced in the Budget relating to direct taxes can be broadly categorised into simplification, standardisation and compliance. The purpose of tax administration is not penalty and prosecution but to provide comfort to the taxpayers.
“We are one of the leading nations to provide the facility of pre-filled forms and compliance has improved because of that. Last year, we saw about 8.5 crore income tax returns, which is a significant increase. Also, about 72 lakh updated returns were filed indicating the enhanced ease in compliance.”
Sanjay Kumar Agarwal, Chairman of Central Board of Indirect Taxes & Customs (CBIC), said the Budget proposals on the Customs front would enhance the competitiveness of domestic industry. He also expressed confidence that the Goods and Services Tax (GST) collection target for 2024-25 would be comfortably met going by the collection trend in the first quarter this fiscal.