New Income Tax Bill: Experts push for simplification, faster dispute resolution and tech-driven refo

As the government prepares to introduce a new Income Tax Bill this week, experts are calling for sweeping reforms to simplify compliance, enhance tax certainty, and leverage technology. Key suggestions include streamlining TDS provisions, accelerating dispute resolution, and modernizing tax systems.

As the government prepares to introduce the new Income Tax Bill in Parliament this week, experts are calling for key reforms aimed at simplifying India’s tax landscape and easing the compliance burden on businesses.

A major expectation is the removal of outdated and redundant provisions, such as those with sunset clauses, alongside the rationalization of complex areas like capital gains tax and TDS regulations. These changes are seen as crucial in making the tax code more concise, clear, and easier to navigate, significantly enhancing the ease of compliance for businesses.

Firstly, there is a need for a reduced timeline for resolving litigation, which currently spans 15 to 20 years. Secondly, to provide tax certainty, we must strengthen the framework for the Board of Advance Rulings

He suggested making the rulings binding on both the taxpayer and the Income-tax Department, which would give taxpayers "upfront clarity and certainty regarding the tax implications of their transactions." This, according to Bhojwani, would not only reduce uncertainty but also improve the ease of doing business.

What government says

A review committee was formed to replace the previous law, and Finance Minister Sitharaman will introduce the new Income Tax Bill this week, which is expected to be half the length of the existing code. The Finance Minister said that the new bill would carry forward the spirit of "nyaya" (justice), with a focus on the concept of "trust first, scrutinize later." This approach is aimed at making the tax system clearer and more straightforward. "The new bill will be clear and direct in text, with nearly half the current law, in both chapters and words," Sitharaman noted. "It will be simple to understand for taxpayers and tax administration, leading to greater tax certainty and reduced litigation."

"I hope the bill will be passed without much difficulty," the Finance Minister added. The bill will be reviewed by the standing committee of Parliament, she confirmed. Central Board of Direct Taxes (CBDT) Chief Ravi Agrawal recently urged industry players to share their suggestions for the new tax bill, which will be tabled in Parliament this week. The new bill, which has been drafted in just six months, aims to simplify language and make tax compliance easier for taxpayers.

Agrawal noted that the new bill was designed to meet international standards, with older provisions removed to make it more concise and easier to navigate. He assured the industry that their suggestions would be carefully considered once the bill is introduced.

Source:-  CFO Economic Times