Budget 2024: Central Board of Direct Taxes (CBDT) chairman Ravi Agrawal has said the comprehensive review of the Income Tax Act, 1961 is an attempt to make the “bulky” law “simpler” for taxpayers.
Union Finance Minister Nirmala Sitharaman, while presenting the Union Budget for fiscal year 2024-25 on July 23, announced that the government would undertake a comprehensive review of the Income Tax Act to make it easy to read.
“The purpose is to make the Act concise, lucid, easy to read and understand. This will reduce disputes and litigation, thereby providing tax certainty to the taxpayers. It will also bring down the demand embroiled in litigation. It is proposed to be completed in six months,” FM Sitharaman had said.
The I-T Act has seen “redundancies” over a period of time, making it “thick and bulky”, Agrawal told news agency PTI in a post-budget interview.
He also said: “The taxpayers also feel that the Act is not so simple, as it ought to be…it is cumbersome…so the attempt is if we can make this Act simpler, simpler to comprehend, simpler in terms of language, simpler in terms of presentation, then that hitch of the taxpayer to actually not see the Act and take the help of a tax practitioner or someone (maybe eased)…”
Faceless assessment regime
Further, the CBDT chairman said: “We are working towards how can we make it (Income Tax Act) simple so that the taxpayer feels comfortable seeing the provisions himself or herself and that it is more user friendly.”
The Income Tax Act, formed in 1922, contains 298 sections, 23 chapters and other provisions in its current form of 1961.
Review of the tax law is also important as technology has become an integral part of tax administration and “we have to see where the gaps are and how we actually can align technology with the provisions of the Act,” said Agrawal.
Under the faceless assessment regime, the Income Tax Department has completed about 6.5 lakh assessment cases and about 2 lakh appeals, he noted.