Revamping Tax Laws: A Step Toward Simplicity and Certainty

The Income-Tax Department's internal committee has reviewed the old direct tax law to simplify language and expand schemes like presumptive taxation. Inspired by countries like the UK and Australia, the new tax bill will aim for clarity, reduced litigation, and increased taxpayer ease.

The Internal Committee of the Income-Tax Department is on a mission to simplify the complex direct tax law, receiving numerous suggestions from the public and industry bodies. The initiative, led by CBDT Chairman Ravi Agrawal, aims to replace the existing 1961 law with a more streamlined and understandable version.

Agrawal, in a recent interview, highlighted that suggestions primarily aimed at simplification of language and structural adjustments of the law were largely received. The committee also studied similar reforms undertaken by countries like the UK and Australia to incorporate best practices.

The new bill, expected in Parliament soon, intends to ease taxpayer compliance, reduce litigation, and offer clearer guidelines, all structured under what the department dubs the PRUDENT approach. This strategy focuses on being proactive, responsive, and user-friendly, among other facets.