Want Changes In Income Tax Act 1961? Tax Department Invites Your Suggestions For IT Act Review, Check Details
Finance Minister Nirmala Sitharaman in 2024-25 Budget presented in July had proposed that the I-T law review would be completed in six months.
The Income Tax department on Monday invited public inputs for review of the six-decade old IT Act
The Income Tax department on Monday invited public inputs for review of the six-decade old I-T Act with regard to simplification of language, litigation reduction, compliance reduction, and obsolete provisions.
The Income Tax Act, of 1961, started its journey in 1922. It contains 298 sections and 23 chapters and other provisions in its current form of 1961.
Under the Budget announcement by Finance Minister Nirmala Sitharaman for a comprehensive review of the Income-tax Act, 1961, the Central Board of Direct Taxes (CBDT) had set up an internal committee to oversee the review and make the Act concise, clear, and easy to understand, which will reduce disputes, litigation, and provide greater tax certainty to taxpayers.
“The committee invites public inputs and suggestions in four categories: simplification of language, litigation reduction, compliance reduction, and redundant/obsolete provisions,” the CBDT said.
A webpage on the e-filing portal — https://eportal.incometax.gov.in/iec/foservices/#/pre-login/ita-comprehensive-review — has been launched and the public can access the page by entering their mobile number and validating it via OTP.
Suggestions should specify the relevant provision of the Income-tax Act, 1961 or Income-tax Rules, 1962 (mentioning the specific section, sub-section, clause, rule, sub-rule, or form number), as the case may be, to which the suggestion relates under the aforementioned four categories.
The Finance Minister in the 2024-25 Budget presented in July had proposed that the I-T law review will be completed in six months.
Considering that the six-month timeline ends in January 2025, it is widely expected that the amended I-T Act could be brought in the Budget session of Parliament.
What Is the Income Tax Act of 1961?
The Income Tax Act of 1961 is the cornerstone of India’s taxation system. It outlines the rules, regulations, and procedures governing the levy, administration, collection, and recovery of income tax in the country. The Act provides a comprehensive framework for taxation, covering various aspects such as:
- Charge of income tax: The Act imposes a tax on the total income of individuals, companies, and other entities.
- Heads of income: Income is classified into five heads: salaries, house property, business or profession, capital gains, and other sources.
- Tax rates: The Act prescribes different tax rates for different income brackets and categories of taxpayers.
- Deductions and exemptions: Certain deductions and exemptions are allowed to reduce taxable income.
- Assessment and collection: The Act outlines the procedures for assessment, filing of returns, and collection of taxes.
- Penalties and interest: Penalties and interest are imposed for non-compliance with the Act.
By making the Income Tax Act more user-friendly and efficient, the government expects to improve tax compliance, increase tax revenue, and foster a more conducive business environment.
