Rate Changes Not Part of Income-Tax Act Review, Confirms Official
The Income-Tax Review Committee, tasked with overhauling India’s outdated tax laws, has confirmed it will not suggest changes to tax rates. Instead, the committee is focusing on simplifying the Income Tax Act, 1961, a senior government official stated.
Key Highlights
- No Rate Modifications
The committee aims to make the law concise, user-friendly, and easier to interpret. Instead of altering tax rates, it seeks to restructure the Act and eliminate outdated provisions, ensuring clarity without compromising its integrity. - Report Progress
So far, the Central Board of Direct Taxes (CBDT) has reviewed 8 out of the 23 reports prepared by the committee. The final set of reports is expected to be ready by mid-December, keeping the project on track. - Simplification Goals
- Rephrasing convoluted provisions to improve readability.
- Removing outdated clauses and redundancies, such as irrelevant deductions that no longer benefit taxpayers.
- Committee Structure
- Chaired by VK Gupta, Chief Commissioner of Income Tax.
- Sub-committees, led by Principal Commissioners, focus on specific areas, including:
- Section 10 exemptions (e.g., HRA, LTA).
- Income from trusts (Sections 11, 12, and 13).
- Penalty provisions, TDS/TCS compliance, and redundant clauses.
- Public Consultation
To ensure transparency and public involvement, the committee has launched an online portal for taxpayers to provide suggestions and feedback. - Expected Outcome
The committee plans to introduce a simplified Income Tax Act during the Union Budget 2025, scheduled for February 1.
Significance
This review marks a significant step toward modernizing India’s tax framework. By focusing on accessibility and eliminating irrelevant provisions, the committee aims to improve compliance and reduce ambiguities. While tax rates remain unchanged, these updates promise a more efficient and taxpayer-friendly system.
