ICAI Tax Reform / ICAI demands reduction in number of sections in the new income tax bill

ICAI Tax Reform: The Institute of Chartered Accountants of India (ICAI) has suggested important changes in the new Income Tax Bill to the Select Committee of the Lok Sabha. These suggestions given on Thursday emphasize on reducing the complexity of the bill and making it more practical. The 31-member committee headed by BJP MP Baijayant Panda will have to submit its report on the first day of the next session of Parliament.

Important suggestions and amendments

ICAI President Charanjot Singh Nanda said that the institute has suggested cutting 90 to 100 sections in the proposed bill. Currently, the new Income Tax Bill contains a total of 536 sections. Apart from this, ICAI has also given suggestions to reduce tax-related litigation and make the language of the bill more simple.

The institute believes that a law with simple language and fewer sections will be more useful and effective for taxpayers and the business community. Charanjot Singh Nanda said, "We want to support the government to make the Income Tax Law effective." Background of the new Income Tax Bill

Union Finance Minister Nirmala Sitharaman introduced the new Income Tax Bill in the Lok Sabha on February 13, which was approved by the Cabinet on February 7. This bill is considered to be a major step to make the Indian tax system more systematic and transparent.

At present, the Income Tax Act, 1961 is in force in India, but after the new bill is passed, it will come into force as the Income Tax Act, 2025 and will replace the 1961 law. The purpose of this new law is to facilitate tax compliance, bring clarity in interpretations and reduce unnecessary litigation.

ICAI's Viewpoint

The suggestions given by ICAI have been made keeping in mind the convenience of taxpayers and the revenue recovery of the government. The organization believes that complex laws not only increase compliance costs but also burden the judicial system. Therefore, a simple and clear law will be beneficial for all parties.

Next Steps

The Select Committee of the Lok Sabha will submit its recommendations after reviewing the suggestions of ICAI. After this, the government can introduce the amended bill in the Parliament. If the suggested changes are accepted, it can prove to be a significant reform for the Indian tax system.

Conclusion: The changes suggested by ICAI, if incorporated in the bill, will be a welcome move for the taxpayers and business community of India. Simple language, fewer sections and new dispute resolution measures will ease tax compliance and also reduce the judicial burden.