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The Union Cabinet, led by Prime Minister Narendra Modi, has approved a new Income Tax Bill, marking a significant shift in India’s tax framework. This new bill, set to replace the six-decade-old Income Tax Act, aims to eliminate outdated amendments and simplify tax regulations for better understanding.
Key Features of the New Income Tax Bill
- Simplified Language: The bill will be written in clear, easy-to-understand terms, reducing dependency on tax experts.
- Elimination of Irrelevant Provisions: Sections that are no longer applicable will be removed.
- Reduced Litigation: The bill is designed to minimize tax disputes by avoiding complex legal jargon and ambiguous provisions.
Next Steps: Presentation in Parliament
With Cabinet approval secured, the new bill will be presented in Parliament next week. It will then be reviewed by the Parliamentary Standing Committee on Finance. The first phase of the current budget session is scheduled to end on February 13, while the second phase will resume from March 10 to April 4.
Why Is a New Income Tax Bill Needed?
The existing Income Tax Act of 1961 has undergone numerous amendments over the years to keep up with evolving business models and technological advancements. However, given the dramatic shifts in economic conditions and income generation methods, a complete overhaul is necessary. The new bill aims to modernize tax regulations, making them more relevant to today’s economy.
Will There Be Changes in Tax Slabs?
The primary objective of this bill is to streamline compliance and improve clarity. As a result, no changes to income tax slabs are expected through this legislation. Any modifications to tax rates typically occur through the Finance Act.
It is worth noting that a similar effort was made in 2010 with the introduction of the Direct Tax Code Bill, 2010, which was later withdrawn after a change in government in 2014.
The approval of this new bill marks a major step toward a modern and transparent tax system, reducing complexities for taxpayers while aligning with India’s evolving economic landscape.
This version improves readability, maintains accuracy, and enhances clarity. Would you like any further refinements?
