Internal panel to prepare draft to simplify tax laws: Rev Secy
This is to make the I-T Act concise, easy to read and understand for taxpayers
NEW DELHI: The first draft of a new simplified income tax law, as proposed in the Budget, will be prepared by an internal committee of the tax department and will undertake stakeholder consultation before finalising the legislation, Revenue Secretary Sanjay Malhotra said on Thursday.
Malhotra said the exercise is not linked to bringing a new direct taxes code, but a comprehensive review of the income tax law. Finance Minister Nirmala Sitharaman in her Budget speech earlier this week announced that a comprehensive review of the Income-tax Act, 1961 will be completed in six months.
“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,” Sitharaman said. To a question whether the review would mean that the government will come with a direct tax code, Malhotra said “It is not a new direct tax code. It is a comprehensive review”.
He said the first draft of the
simplified income tax law, post the review, would be prepared by an internal committee of the tax department.
“We would like to have a collaborative approach. The first draft will be prepared by an internal team and then we will see how to go ahead with stakeholder consultation,” Malhotra said at an interactive session with
industry chamber FICCI. The revenue secretary further said “our approach towards taxation has always been and will continue to be in the mode of collaboration and not confrontation. The purpose of our proposals, both on the policy side as well as on the implementation side, are to collect taxes from wherever they are due but do it in a manner that gives respect and trust to the taxpayers and collect them in a smooth and hassle-free manner,” he added.
Highlighting the broad themes of the Union Budget, Malhotra said the whole effort in the Budget is to make the tax process simpler for the taxpayers.
On the indirect tax front, the abolition of angel tax, decriminalising the laws, and reduction in duties are some of the budget proposals that will benefit the industry. Ravi Agarwal, chairperson of the Central Board of Direct Taxes, said the new tax regime with new slabs and rates is beneficial for all and around two-thirds of the total taxpayers are filing income tax returns through the new tax regime. He also highlighted the benefits of rationalisation of taxation on capital gains in different asset categories.
Sanjay Kumar Agarwal, chairperson, Central Board of Indirect Taxes and Customs, said the indications on the indirect taxes in the Union Budget 2024-25 are clear that their is a need for simplified taxation and rationalised rates to enhance supply chains and ensure the industry remains competitive globally.
The purpose of our proposals, both on the policy side as well as on the implementation side, are to collect taxes from wherever they are due but do it in a manner that gives respect and trust to the taxpayers and collect them in a smooth and hassle-free manner — Sanjay Malhotra, Revenue Secretary