New Income Tax Bill to Simplify Compliance, Boost Transparency: Experts

New Delhi- Industry experts anticipate that the new Income Tax Bill, expected to be introduced this week by Finance Minister Nirmala Sitharaman, will enhance transparency in tax laws through clearer language and simplified provisions. The bill, which will be reviewed by Parliament's Standing Committee on Finance, aims to help taxpayers better understand their obligations and rights while aligning with the government's 'trust first, scrutinize later' approach.

A key expectation is that the new legislation will address complex issues like determining individual tax residency in India, while eliminating obsolete provisions to reduce the overall volume of tax laws. According to Harsh Bhuta, Partner at Bhuta Shah & Co., the bill won't introduce new taxes but will focus on improving tax compliance. Notably, the government will be able to implement tax relief measures through executive orders rather than waiting for budget proposals.

The proposed legislation is expected to simplify compliance processes, reduce scrutiny cases for honest taxpayers, and minimize litigation issues. Sandeep Chaufla, Partner at PwC, notes that the review of the Income-tax Act, 1961, aims to modernize India's tax system to improve ease of doing business, reduce interpretation ambiguities, and enhance tax administration. The ultimate goal is to bring India's tax-GDP ratio closer to global standards while supporting sustainable economic growth.