The Income Tax Department has sought suggestions on the comprehensive review of the Income-Tax Act, 1961.
Indications are that the review will be completed before the Budget and a new Income Tax law may be introduced in the Union Budget for fiscal year 2025-26. Though the date for the presentation of Budget is yet to be announced but, in all likelihood, it will be on February 1.
According to the Department, an internal committee has been formed to oversee this review. The committee invites public inputs and suggestions in four categories: Simplification of Language, Litigation Reduction, Compliance Reduction, and Redundant/Obsolete Provisions. To facilitate this, a webpage has been launched on the e-filing portal with the following link: https://eportal.incometax.gov.in/iec/foservices/#/pre-login/ita-comprehensive-review.
The public can access the page by entering their mobile number and validating it via OTP. 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), to which the suggestion relates under the aforementioned four categories, the statement said.
In her Budget speech, Finance Minister Nirmala Sitharaman had proposed a comprehensive review of the Income-tax Act, 1961.
Commenting on government’s move, Maneesh Bawa, Partner at Nangia Andersen India said that 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. Simplification of language aims to reducing complexity and making the Act easier to understand. Litigation reduction intends to identify provisions that lead to disputes and offering solutions to minimize litigation.
Compliance reduction will ensure streamlining processes to reduce the administrative burden on taxpayers. At the same time removal of redundant/obsolete provisions will help to modernise the law. “By encouraging input in these areas, the government aims to make the tax system more efficient and user-friendly, ensuring long-term benefits for all stakeholders,” Bawa said.