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Informist, Thursday, Mar. 6, 2025

 

NEW DELHI – The Institute of Chartered Accountants of India Thursday met the select committee of the Lower House of Parliament formed to examine the Income Tax Bill, 2025, and submitted their views on the same. Their suggestions pertained to three broad contentions that ICAI has been flagging--the need to lower the number of sections in the new Bill, reduce litigation, and simplification of the language, ICAI President Charanjot Singh Nanda said.

 

"We propose that the sections be rationalised, be pruned, and made concise. We want to cut them by 90-100 and make them close to 450," Nanda said in a press briefing. In the proposed new Income Tax Bill, the government has lowered the number of sections to 536 spread across 622 pages, 201 pages fewer than the 1961 Act. He suggested that there is a case for the government to merge a few sections in the new Bill in order to make it more concise.

 

On the issue of lowering litigation, Nanda said there are certain interpretations which need to be clarified that ICAI gave suggestions on. ICAI's delegation, comprising of 10 members including president and the vice president, had a meeting with the parliamentary select committee for over two hours, Nanda said. He, however, did not divulge the granular recommendations made by ICAI as the discussions were confidential.

 

Announced in the Budget for the financial year 2024-25 (Apr-Mar), the new Bill aims to simplify the Income Tax Act, 1961, and make it more lucid and easier for taxpayers to calculate taxes and file returns. Finance Minister Nirmala Sitharaman introduced the revamped Bill in Lok Sabha on Feb. 13, and moved a motion to refer the Bill to a select committee of the Lok Sabha, which was adopted by the house with voice vote.

 

Following this, Lok Sabha Speaker Om Birla constituted a 31-member committee including the Bharatiya Janata Party's Bhartruhari Mahtab, Naveen Jindal and Baijayant Panda, the Trinamool Congress' Mahua Moitra, the Revolutionary Socialist Party's N.K. Premachandran, and the Nationalist Congress Party's (SCP's) Supriya Sule. The speaker appointed BJP leader Baijayant Panda as the chairperson of the committee.

 

Nanda said currently the select committee is seeking feedback from experts and it will be up to them eventually what they would like to retain and incorporate in the Bill.

 

Procedurally, the new Income Tax Bill aims to give greater autonomy and powers to the income tax department and government to bring about policy changes and amnesty schemes for taxpayers. The government, however, will have to lay these notifications before each House of Parliament after issuing them.

 

The new bill also proposes to replace 'assessment year' and 'previous year' with 'tax year', making the language easier for taxpayers. "For the purposes of this Act, 'tax year' means the twelve-month period of the financial year commencing on the 1st April." The use of the phrase 'assessment year', which refers to the year following the one for which tax is being paid, caused confusion among taxpayers, especially new ones.

 

Under the new bill, taxpayers will also need to report their crypto transactions. "Any person, being a reporting entity, as prescribed, in respect of a crypto-asset, shall furnish information in respect of a transaction of such crypto-asset in a statement," the bill read.  End

 

Reported by Priyasmita Dutta and Sagar Sen

Edited by Ashish Shirke

 

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