Expectations are rising that the long-awaited simplification of India's Income Tax Act, 1961, could soon become a reality. The Modi government is set to initiate a feedback process starting in October, seeking input from private sector stakeholders and tax experts to streamline the nation's direct tax laws.
At a recent meeting with industry chambers, the government revealed plans for a new feature on the Income Tax portal. This feature will allow businesses, professionals, and other stakeholders to submit suggestions for simplifying various sections of the Income Tax Act. The goal is to reduce the complexity of legal language and minimize litigation.
Earlier this year, the Central Board of Direct Taxes (CBDT) established an internal committee to review the six-decade-old tax law. The committee’s objective is to modernize the Act by removing outdated provisions and simplifying the language to make it more concise and user-friendly.
"The IT law review aims to simplify language and reduce litigation," a source close to the matter revealed. The revenue department hopes to launch the portal feature by early October, with feedback incorporated into a draft of the amended Income Tax Act. Finance Minister Nirmala Sitharaman has set a six-month deadline for this review, with the potential for the revised law to be included in the 2025 Finance Bill.
Industry insiders are hopeful that this initiative will lead to a more straightforward tax system that promotes compliance and reduces legal disputes, offering much-needed relief to businesses and individuals alike.
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