A big update has come regarding the tax system. The Finance Ministry is working on a new income tax system. Sources told India Today that the government’s aim is to simplify the tax system and process. Under the new system, 125 sections and sub-sections may be abolished.
India Today has received information from sources that the new Income Tax Act will soon be introduced to replace the old Income Tax Act, the scope of the new Income Tax Act is to simplify it. The Finance Ministry is considering the possibility of announcing it in the upcoming budget in February 2025. The Finance Minister is aiming to eliminate unnecessary sections and sub-sections from the Income Tax Act.
Currently, the Finance Ministry is busy making amendments in the Income Tax Act, after which the revised ‘Income Tax Law’ will be presented to the country. If the new system comes into effect, it can be a big change for taxpayers. The Finance Ministry can eliminate unnecessary sections and subsections to simplify the process of tax.
It is being considered that the tax system should be made as simple as possible. Prime Minister Narendra Modi is focusing on bringing more and more people under the tax net and this is the reason why the government has come up with a new tax system.
Feedback was sought under the new system.
The ministry is reviewing the New Tax System and is consulting with experts. Meanwhile, it has also been learned that a great response has been received to make the process of filing tax easy and simple. In almost all the responses, there has been a request to make tax filing easy and reduce the compliance burden.
This work will be completed in the next month
The work of reviewing and finalizing the new Income Tax Act will be completed in the coming months. The aim of the reform is to make the tax code more comprehensive, reduce the compliance burden and improve clarity for taxpayers. Under this change, new tables will be introduced for expenditure, investment, holding, assets, liabilities, while a process of investigation for income source may also be introduced.
Income Tax Act 1961 came into force in 1962
It is worth noting that the Income Tax Act 1961 came into force on April 1, 1962 and is applicable all over India till date. In 2020, the government introduced a new tax system. For the financial year 2023-24 (assessment year 2024-25), 72% of the taxpayers had filed their returns under this new tax system.
When was income tax implemented for the first time in India?
Let us tell you that the income tax system in India was implemented in 1860 by Sir James Wilson, who was the finance minister of pre-independence India. This system was implemented to compensate for the financial loss incurred by the government due to the military revolt of 1857.
