(MENAFN- KNN India)
New Delhi, Aug 23 (KNN) In a significant development for India's taxation landscape, Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal has unveiled plans for a comprehensive review of the Income Tax Act, 1961.
This initiative, announced during an event marking 165 years of income tax in India, aims to simplify the law, improve compliance, and expedite the appeals process.
At the heart of this reform is the formation of an internal committee comprised of income tax officials from across the country. This panel has been tasked with the crucial role of identifying areas for improvement in the existing law, ensuring that the review process is thorough and inclusive.
A key focus of the committee will be to study and potentially adopt international taxation practices. This move towards incorporating global best practices is expected to enhance India's tax framework, bringing it in line with world standards and potentially making it more competitive on the global stage.
The review process will also target the elimination of redundancies within the current Act. Outdated clauses and those that have reached their sunset will be removed, streamlining the law and making it more relevant to current economic realities. This pruning of obsolete elements is expected to significantly simplify the Act for both tax authorities and taxpayers.
Simplification for taxpayers is a central goal of this review. By making the law more concise and easier to understand, the CBDT hopes to reduce disputes and litigation, potentially leading to greater compliance and a smoother tax collection process.
In a move to address immediate concerns, Agrawal has promised to deploy additional officers within the next 10-15 days to clear the substantial backlog of pending appeals at the department level. This step aims to expedite the appeals process, providing quicker resolution to taxpayers' issues.
This comprehensive review aligns with Finance Minister Nirmala Sitharaman's announcement in the Budget 2024-25, where she called for an overhaul of the Income Tax Act.
The minister has set an ambitious six-month deadline for this task, emphasising the need for clarity and simplicity in tax communications to encourage compliance.
The Income Tax Act, which has been in effect since 1961 and contains 298 sections across 23 chapters, has long been criticized for its complexity.
This review represents a significant step towards modernising India's direct tax framework and potentially easing the burden on taxpayers.
As this process unfolds, taxpayers and industry experts will be keenly watching for changes that could impact tax planning, compliance, and dispute resolution in the coming years.
(KNN Bureau)
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