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New I-T Bill Will Simply Tax Framework
ECONOMY & POLICY

New I-T Bill Will Simply Tax Framework

The new Income Tax Bill will simplify the country's six-decade old tax structure as well as help boost growth of MSMEs, chartered accountants' body ICAI said.The Institute of Chartered Accountants of India (ICAI), a key stakeholder in tax matters, is also setting up a five-member group to closely examine various provisions of the bill. 
Introduced in Lok Sabha, the bill seeks to achieve tax certainty by minimising the scope of litigation and fresh interpretation. With intent to simplify the six-decade old tax framework, the main objective was to streamline the provisions, removing obsolete references and creating a simpler legal framework, ICAI said in a release. 
It said the objectives have been sought to be achieved by replacing the concept/terminology of previous year and assessment year with 'tax year' and 'financial year succeeding the tax year', doing away with the provisos and explanations, among others. 
ICAI President Charanjot Singh Nanda said the bill is a measure for strengthening employment generation and MSME growth as it would simplify India's tax structure and will give a boost to the Indian economy at large. 
"The provisions relating to charitable trusts spread across different Chapters of the Income Tax Act, 1961 are being simplified and consolidated in a single chapter. All the TDS provisions are now contained in one section and presented in the form of a table. "All presumptive income provisions for residents have been grouped and presented in a single clause," the release said. 
Also, all presumptive income provisions for non-residents have been grouped and presented in a single clause. "Due to extensive use of tables, the number of words in the new bill is being reduced by almost 50 per cent vis-a-vis the Income Tax Act, 1961. Overall, it is a genuine attempt towards simplification of income-tax law for ease of reading and comprehension," the release noted. Among other aspects, ICAI said the removal of provisos and obsolete sections are in line with its suggestions for comprehensive review of the Act. 
Further, various suggestions, including those relating to increase in salary threshold for 'specified employees' for perquisite valuation, simplified regime for smaller trusts and institutions and proposing long term capital gains of a business trust to tax at 12.5 per cent rather than MMR (Maximum Marginal Rate) have been proposed in the Finance Bill, 2025 as well as in the new bill. 

The new Income Tax Bill will simplify the country's six-decade old tax structure as well as help boost growth of MSMEs, chartered accountants' body ICAI said.The Institute of Chartered Accountants of India (ICAI), a key stakeholder in tax matters, is also setting up a five-member group to closely examine various provisions of the bill. Introduced in Lok Sabha, the bill seeks to achieve tax certainty by minimising the scope of litigation and fresh interpretation. With intent to simplify the six-decade old tax framework, the main objective was to streamline the provisions, removing obsolete references and creating a simpler legal framework, ICAI said in a release. It said the objectives have been sought to be achieved by replacing the concept/terminology of previous year and assessment year with 'tax year' and 'financial year succeeding the tax year', doing away with the provisos and explanations, among others. ICAI President Charanjot Singh Nanda said the bill is a measure for strengthening employment generation and MSME growth as it would simplify India's tax structure and will give a boost to the Indian economy at large. The provisions relating to charitable trusts spread across different Chapters of the Income Tax Act, 1961 are being simplified and consolidated in a single chapter. All the TDS provisions are now contained in one section and presented in the form of a table. All presumptive income provisions for residents have been grouped and presented in a single clause, the release said. Also, all presumptive income provisions for non-residents have been grouped and presented in a single clause. Due to extensive use of tables, the number of words in the new bill is being reduced by almost 50 per cent vis-a-vis the Income Tax Act, 1961. Overall, it is a genuine attempt towards simplification of income-tax law for ease of reading and comprehension, the release noted. Among other aspects, ICAI said the removal of provisos and obsolete sections are in line with its suggestions for comprehensive review of the Act. Further, various suggestions, including those relating to increase in salary threshold for 'specified employees' for perquisite valuation, simplified regime for smaller trusts and institutions and proposing long term capital gains of a business trust to tax at 12.5 per cent rather than MMR (Maximum Marginal Rate) have been proposed in the Finance Bill, 2025 as well as in the new bill. 

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