New Tax Code to Replace Six-Decade-Old Income Tax Act within Six Months, Says Finance Minister Sitharaman
Nirmala Sitharaman, the Union Finance Minister, has announced the upcoming introduction of a new tax code or Income Tax Act within the next six months. This new legislation aims to streamline the tax system by employing clear and accessible language. During the 165th Income Tax Day celebrations, Sitharaman assured that at least some sections of the new act will be easily comprehensible.
In addition, the Finance Minister emphasized the importance of simplifying communication between tax officers and taxpayers to alleviate apprehension. She underscored the significance of transparency and clarity in tax-related communications, advising against disproportionate enforcement actions. Sitharaman also stressed the need for judicious use of powers by tax officers, urging that taxpayers should not face unwarranted harassment.
Notably, CBDT Chairman Ravi Agrawal, who was present at the event, highlighted the comprehensive review of the Income Tax Act, 1961, with the goal of creating a more concise, clear, and understandable act, ultimately reducing litigation and providing tax certainty to taxpayers.
Sitharaman called for the use of plain language in tax notices, ensuring their comprehensibility to the general public. She emphasized that communication should be straightforward and easily understood by everyone.
The finance minister reiterated the tax department’s objective to collect taxes in a fair and friendly manner, promoting voluntary compliance over inducing fear. She also emphasized the need to enhance the efficiency of the tax refund process, emphasizing transparency and fairness as fundamental principles.
In conclusion, Sitharaman reminded tax officers of their responsibility to balance their powers with fairness and integrity, aiming to make tax compliance less intimidating and more accessible for taxpayers.