CBDT Forms Committee to Review Income Tax Act, Plans to Eliminate ‘Sunset’ Clauses
By: Admin | August 22, 2024 | Categories: Tax News | 4 Min Read
The Central Board of Direct Taxes (CBDT) has established a new committee to review the Income Tax Act of 1961. This initiative aims to simplify the law and remove outdated “sunset” clauses. CBDT Chairman Ravi Agrawal announced that the committee, which includes income tax officials from across India, has begun its work.
Key Goals of the CBDT Income Tax Act Review
1. Removing Obsolete Tax Clauses
The committee’s primary goal is to identify and eliminate obsolete clauses that no longer serve their purpose. Consequently, this initiative will streamline the Act, making it more efficient and easier for taxpayers to comply with. By removing these outdated provisions, the committee aims to enhance the overall clarity and effectiveness of the tax law.
2. Adopting International Tax Best Practices
Additionally, the review will incorporate international best practices. This effort aims to modernize India’s direct tax law and align it with global standards. As a result, the new framework will provide a more robust foundation for tax administration, reflecting current global trends and practices.
3. Improving Tax Communication and Clarity
Moreover, a key focus is improving the clarity of tax notices and communications. The committee plans to make these documents more understandable, thereby reducing taxpayer confusion. Simplified communication is expected to enhance overall compliance and ease the tax-filing process for individuals and businesses.
Timeline for Income Tax Act Review and Reform
The central government mandated this review as part of its broader tax reform agenda. Therefore, the committee is diligently working to complete the review within six months, as outlined in the 2024-25 Union Budget. This timeline demonstrates the government’s commitment to implementing significant and timely changes.
Impact of Tax Act Changes on Taxpayer Compliance
The anticipated revisions to the Income Tax Act are expected to produce a more concise and user-friendly law. Consequently, these updates will align the Act with international practices, reducing disputes and litigation. As a result, taxpayers can look forward to greater certainty and ease in their tax obligations.
CBDT’s Assurance on Timely Tax Act Revision
Chairman Agrawal has assured Union Finance Minister Nirmala Sitharaman that the review will be completed on schedule. Furthermore, he noted that additional officers will be assigned within the next 10-15 days to expedite the clearance of pending tax appeals. Overall, this review represents a significant step toward modernizing India’s tax framework and ensuring its effectiveness in today’s global economic environment.
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