New Delhi, Feb 9: The revised income tax law is expected to be clearer, more concise, and consistent, with the inclusion of illustrative examples to assist in understanding and interpretation, industry experts have noted. The changes aim to eliminate outdated and redundant provisions from the existing tax framework.
The ongoing review of the Income-tax Act, 1961, is focused on modernizing and simplifying India’s tax structure, aligning it with broader economic objectives.
“The new framework is designed to improve ease of doing business, reduce interpretative ambiguities, and enhance tax administration and compliance. These changes will play a key role in increasing India’s tax-to-GDP ratio to global standards, fostering sustainable economic growth,” said Sandeep Chaufla, Partner at Price Waterhouse and Co (PwC).
The review is also expected to lead to a more transparent and efficient tax system, attracting investments and advancing the government’s vision of a developed India (Viksit Bharat), Chaufla added.
Union Finance Minister Nirmala Sitharaman is optimistic that the new Income Tax Bill will be introduced in the coming week and will be referred to the Parliament’s Standing Committee on Finance for further review.
The bill, which has already received Cabinet approval under the chairmanship of Prime Minister Narendra Modi, aims to simplify the tax filing process and provide greater relief to the middle class by putting more disposable income in their hands.
Once the bill is passed by Parliament, the government will determine the appropriate timeline for its implementation, Sitharaman stated.
The proposed legislation is expected to widen the tax base, particularly following the recent increase in the exemption limit to ₹12 lakh, as announced in the Union Budget.
The existing Income Tax Act, which was introduced in 1961, will be replaced with a streamlined version tailored to meet the requirements of the modern era. One of the key highlights of the new bill is the drastic reduction in the law’s length—from the current 6 lakh words to around 3 lakh—making it more user-friendly and easier for taxpayers to understand.