Centre to Undertake Comprehensive Review of Direct Tax Code
In a recent announcement, Sanjay Malhotra, the Secretary Revenue of the Ministry of Finance, revealed that the Centre is set to conduct a thorough review of the Direct Tax Code within the next six months. This review will be orchestrated by an internal committee before being opened up to stakeholder consultation.
Malhotra emphasized the intention to foster a collaborative approach for the implementation, highlighting the forthcoming consultation process. He clarified that the objective of this exercise is not to introduce a new Direct Tax Code, but to comprehensively review the existing income tax law.
This initiative follows Finance Minister Nirmala Sitharaman’s Budget declaration of a comprehensive review of the Income-tax Act, 1961. The aim is to streamline the Act, making it more concise, lucid, and user-friendly. This overhaul is expected to curtail disputes and litigation, thereby providing taxpayers with greater certainty. Additionally, a standard operating procedure for defaults in the Tax Deducted at Source will be introduced, accompanied by simplified and rationalized compounding of such offenses.
Malhotra underlined the Centre’s commitment to ensuring a “hassle-free, simple,” and collaborative approach to tax implementation. He stressed that the focus remains on fostering a collaborative environment rather than confrontation, with the overarching goal of collecting taxes due while simultaneously showing respect and building trust with taxpayers.
The entirety of the Budget’s efforts, as expressed by Malhotra, is aimed at simplifying tax processes and ensuring a smooth and trouble-free collection of taxes.
