Govt Moves To Simplify Tax Laws To Reduce Ambiguity & Litigation: Mos Finance

2026-03-23 02:09:10

(MENAFN- KNN India) New Delhi, Mar 23 (KNN) Minister of State for Finance Pankaj Chaudhary replying to a question in the Parliament on Monday said that the government has undertaken steps to simplify income tax laws while minimising ambiguity and litigation.

A comprehensive review of the Income-tax Act, 1961 was carried out to make provisions clearer, concise and easier to understand.

Chaudhary noted that the government retained key legal terms already interpreted by courts, used simpler language, and introduced formulae and tables to reduce scope for multiple interpretations.

He added that amendments are made after stakeholder consultations, supported by explanatory memoranda and FAQs. The Central Board of Direct Taxes (CBDT) also issues circulars and guidelines to clarify provisions and address taxpayer concerns.

Automated System for Lower or Nil TDS

The government has proposed a rule-based automated system for issuing certificates for lower or nil tax deduction at source (TDS). Amendments under the Finance Bill, 2026 allow for electronic issuance of such certificates without requiring applications to the Assessing Officer. Detailed rules will be finalised after the bill is enacted.

Nil Tax Liability Assessees

The number of taxpayers declaring zero gross tax liability has shown some variation in recent years, standing at 1.34 crore in 2021–22, 1.25 crore in 2022–23, 1.19 crore in 2023–24, 1.26 crore in 2024–25 and 1.22 crore in 2025–26.

The government stated that no specific data is available on cases of ambiguity or legal challenges faced by taxpayers since 2020, while noting that litigation may also arise from instances of tax evasion or avoidance.

Measures to Reduce Litigation

The minister highlighted, to improve certainty and reduce disputes, the government has taken steps including periodic legal reviews, stakeholder consultations, issuance of explanatory notes, and regular clarifications by tax authorities.

These measures aim to enhance transparency, simplify compliance, and build taxpayer confidence in the system.

(KNN Bureau)

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