Government Confirms No Tax Rate Changes in Income Tax Act Review: The income tax review committee, assigned with the task of modernizing the longstanding tax laws of the country, will not propose any changes to tax rates. Instead, the committee’s focus will be on streamlining the Income Tax Act to ensure it is more concise and user-friendly, according to a senior government official.
The committee aims to submit a total of 23 reports, each addressing different chapters of the Income Tax Act of 1961, by mid-December. The official stated, “The review committee will not recommend any changes to the tax rates. Their goal is to simplify the Act, making it more concise, user-friendly, and easier to understand.”
Currently, the sub-committees of the panel are working diligently to finalize the reports. To date, eight reports have already been submitted to the Central Board of Direct Taxes (CBDT).
The Union Budget is typically presented on February 1, and it is expected to include a simplified version of the Income Tax Act. The official mentioned, “Reports are being submitted and are being discussed concurrently by the CBDT. When the review concludes, the final compilation will be forwarded to the finance minister.”
Finance Minister Nirmala Sitharaman initiated the review of the I-T Act, which consists of 298 sections, during the budget presentation in July.
The intent of the review is not to change the law’s complexity or reduce its intricate details at this time. Instead, the focus is on rephrasing complex provisions, removing outdated clauses, and cutting down redundancies. According to the official, “Certain provisions have become obsolete, such as deductions that are no longer relevant but still exist in the statute. These will be addressed.”
Committee report
Chaired by Chief Commissioner of Income Tax VK Gupta, the committee includes several sub-committees and working groups, each concentrating on specific chapters of the Act. These sub-committees are examining areas like compliance, exemptions under Section 10 (including housing rent allowance and leave travel allowance), income from trusts (under Sections 11, 12, and 13), penalty provisions, redundancies, and TDS/TCS.
Each sub-committee is led by a principal commissioner of income tax and comprises over 80 officials.
Additionally, the committee has launched an online portal to gather public suggestions. The official emphasized, “This initiative aims to simplify the law’s language without changing its provisions. Our goal is to make the law accessible and easier for taxpayers to understand.”