Govt to introduce new income tax bill in budget session

NEW DELHI: Finance Minister Nirmala Sitharaman is preparing to present a bill for a new direct tax law in the budget sessionwhich will focus on simplifying provisions, removing redundant ones and attempting to make the language more user-friendly.
Review committee decides whether new law to replace 63-year-old Income Tax Act will be in two or even three parts, sources told TOI. Although the government indicated that the draft law drawn up by the group of officers would be released for public comment, it decided to send a strong message at a time when it faces criticism due to complex tax laws and will present the bill, which can then be amended based on feedback from taxpayers and experts.
As a result, officials from the Ministry of Finance and the Prime Minister’s Office have worked closely with the panel over the past six to eight weeks to ensure it is ready by the time the budget is presented.

Sitharaman, who announced the move in the July budget, is expected to mention the bill in her February 1 speech, although it remains to be decided whether the bill will be tabled in the first or second half of the session .
This is at least the third attempt to rewrite the Income Tax Act since the Direct Tax Code Bill was introduced in Parliament in 2010. Subsequently, the Modi government has established a group of experts, whose reports were not made public and the recommendations were largely not taken up.
The committee was asked to ensure that the “conditions” of the law, and there are thousands of them, are removed from the new legislation.
Similarly, several sections, rendered redundant as these clauses were deleted from the IT Act over the years, are excluded. “The language itself can be difficult for ordinary people to understand and the committee has been asked to make it as simple as possible,” a source said.
But the government is not including new issues in the bill, at least for now. Officials cautioned, however, that a change in language could be a source of litigation, as taxpayers would want a new interpretation in several cases.