'Review of Income Tax Act is a step towards providing convenience to taxpayers', CBDT chief's big statement

Central Board of Direct Taxes (CBDT) Chairman Ravi Agarwal has said that the announcement made in the budget regarding the comprehensive review of the Income Tax Act, 1961 is an attempt to make this 'heavy' law 'simple' to understand and easy to use for taxpayers as well as to connect it with new technology processes. The Income Tax Act 1961 currently consists of 298 sections, 23 chapters, and other provisions.

In an interview given to 'PTI-Bhasha' on Wednesday after the budget, Agarwal said that over time many additional things have been added to this Act, which has made it "cumbersome and heavy". He said, "Taxpayers also feel that this Act is not as simple as it should be. It is cumbersome, so the effort is if we can simplify this Act, make it simple to understand, make it simple in terms of language, make it simple in terms of presentation, so that the trouble for taxpayers to understand the Act and take the help of a tax practitioner or any other person may be reduced.

The CBDT chief said, "We are working in this direction as to how we can simplify it (Income Tax Act) so that the taxpayers themselves feel comfortable looking at its provisions and it is more user-friendly." Aggarwal said that it is important to review the law, as technology has become an integral part of tax administration and we have to see where the flaws are and how we can actually combine technology with the provisions of the Act. He said, "We are considering further improvements in the law."

It is worth noting that Finance Minister Nirmala Sitharaman while presenting the Union Budget 2024-25 last Tuesday, had announced that a comprehensive review of the Income Tax Act, 1961 would be completed in six months. Sitharaman had said, "The aim is to make the Act concise, clear, easy to read and understand. This will reduce disputes and litigation, thereby providing tax certainty to taxpayers."