New Income Tax Bill Simplifies Compliance And Boosts Transparency

The Indian government is preparing to introduce a new Income Tax Bill to simplify the country’s tax system and make it more transparent. Union Finance Minister Nirmala Sitharaman is expected to present the bill this week, which will then undergo scrutiny by the Parliament’s Standing Committee on Finance.

Key Highlights Of New Income Tax Bill

The bill’s key feature is its focus on clear, unambiguous language in tax provisions, making it easier for taxpayers to understand their rights and obligations. Industry experts anticipate major changes compared to the existing tax laws.

Meanwhile, Harsh Bhuta, Partner at Bhuta Shah & Co., highlighted that the new bill would address the complexity of determining tax residency in India, which currently involves multiple conditions. The proposed bill aims to reduce the number of tax provisions by eliminating outdated and redundant rules, ultimately simplifying the entire compliance process.

Expert’s Opinion On Income Tax Bill

As per the experts, the new bill won’t introduce new taxes, it will focus on improving tax compliance and reducing the burden on taxpayers. However, the government will also have the flexibility to make changes to tax reliefs through executive orders, rather than waiting for budget proposals.

Apart from this, one of the significant changes anticipated is a reduction in scrutiny cases for taxpayers with gross non-compliance, minimizing the harassment of honest taxpayers and cutting down on litigation. The bill’s ultimate goal is to enhance transparency, improve compliance, and streamline the tax system in line with global economic goals.

Moreover, Sandeep Chaufla, Partner at Price Waterhouse Co. (PwC), emphasized that the review of the 1961 Income Tax Act aims to modernize the tax system, improve administration, and support sustainable economic growth. The move will likely help increase India’s tax-GDP ratio to global levels and facilitate the ease of doing business.

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