A major update on the tax system has been released. The finance ministry is working on a new income tax system. Sources told India Today that the government is aiming to simplify the tax system and processes. Under the new system, 125 departments and sub-departments are likely to be abolished.
India Today has learnt from sources that a new income tax law will be introduced to replace the old one and the scope of the new income tax law is to simplify it. The finance ministry is considering the possibility of announcing this in the upcoming budget of February 2025. The finance minister aims to eliminate unnecessary sections and sub-sections of the Income Tax Act.
Currently, the Ministry of Finance is busy reforming the Income Tax Law, and the revised Income Tax Law will be submitted to the state for review. If the new system comes, then it may be a huge change for taxpayers. The Ministry of Finance can remove unnecessary sections and subsections to simplify the tax process.
Thinking is being taken to make the tax system as simple as possible. Prime Minister Narendra Modi is committed to bringing more and more people into the tax net, which is why the government is introducing the new tax system.
New system sought feedback
Regarding the new tax system, the ministry is reviewing and consulting experts. At the same time, it is learned that there has been a huge response from people to simplify the tax filing process. Almost all responses require simplifying tax filing and reducing the compliance burden.
The work will be completed next month.
The review and finalization of the new income tax law will be completed in the coming months. The reforms are aimed at making the tax law more comprehensive, reducing the compliance burden and improving transparency for taxpayers. Under the change, new expenditure, investment, holding, assets, liabilities tables will be introduced, while a source of income investigation process may also be introduced.
The Income Tax Act 1961 came into force in 1962
It is noteworthy that the Income Tax Act, 1961 came into force on April 1, 1962 and is applicable throughout India till date. In 2020, the government introduced a new tax regime. In the financial year 2023-24 (assessment year 2024-25), 72% of taxpayers have filed tax returns under this new tax regime.
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