By bigbreakingwire 
The Union Cabinet approved the new Income Tax Bill on Friday, with plans to introduce it in Parliament next week. The bill aims to simplify the current Income Tax Act, reducing the number of sections by nearly a third and making the law more concise.
A government official explained that the new bill would cut sections by 25-30%, removing unnecessary provisos and explanations, and halving the word count. This change is designed to make the law easier to understand and apply. Despite the changes, the official assured that the government has not been given excessive power. The key decisions about income quantification and tax rates remain with Parliament, as every rupee collected must have Parliamentary approval, a fundamental principle that will not change. Some procedural details will be shifted into rules to simplify the process.
Union Finance Minister Nirmala Sitharaman expressed her optimism about introducing the bill in the Lok Sabha next week. After it undergoes scrutiny by the Standing Committee on Finance, the government will decide on its rollout based on Parliament’s feedback. The bill aims to put more money in the hands of the middle class and make the filing process easier.
One key change expected in the new bill is an effort to widen the tax base, addressing concerns raised after the exemption limit was increased to Rs 12 lakh in the Union Budget. The current Income Tax Act, which was implemented in 1961, is being replaced by this new law to better meet the needs of the 21st century.
The simplification of the bill is significant; the old Income Tax Act contained about 6 lakh words, while the new bill will be reduced to around 3 lakh words. This is expected to make it more understandable for taxpayers, streamlining the process and improving compliance.
Finance Secretary Tuhin Kanta Pandey said the new income tax bill has been completely rewritten and will not introduce any new taxes or changes to the existing tax rates.
New Income Tax Bill to Simplify Compliance and Enhance Transparency
The new Income Tax Bill aims to make tax laws clearer and easier to understand, ensuring taxpayers know their rights and responsibilities.
Finance Minister Nirmala Sitharaman is expected to introduce the bill this week, after which it will be reviewed by the Parliament’s Standing Committee on Finance.
Experts say the bill will not introduce new taxes but will focus on making tax compliance simpler. It is also expected that tax reliefs or changes in tax laws will no longer have to wait for the annual budget and can be made through executive orders.
The bill aims to reduce complicated procedures, making tax filing easier and saving time and money for taxpayers. It will also improve the ease of doing business, reduce confusion in tax rules, and strengthen tax administration. According to Price Waterhouse and Co (PwC), these changes will help India increase its tax-to-GDP ratio and promote steady economic growth.
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