Cabinet is likely to consider Friday Revised Income Tax Bill

New -Delhi: The Union Cabinet is likely to consider the Income Tax Bill, 2025 Friday, to reintroduce and succeed in parliament next week, two people who are familiar with the development said. The bill seeks to replace the six-decade-old direct tax legislation with a simplified statute. The Lok Sabha is likely to discuss the bill for passage on Monday or Tuesday, the persons said about the condition that they are not mentioned. The government intends to implement the simplified law from the next financial year. The revised bill contains proposals from the Lok Sabha Select Committee led by Bharatiya Janata Party Legislature Baijayant Panda. The panel carefully scanned the earlier concept to ensure that the simplification did not lead to wording that could be interpreted differently. In an interview that Mint published on July 22, Panda explained that the bill was not intended to make substantial changes to the law and the mandate of the committee was to simplify it. “Our mandate was to make the act as it exists, clear, simple and easy to comply.” The simplified version of the direct tax law is expected to reduce interpretation -related disputes and bring more structural cohesion into various tax concepts spread across different divisions. The original concept tried to lower the number of words in the Income Tax Act 1961 from more than 500,000 to about 260,000. The revised bill will have some supplements to ensure that simplifying no ambiguity. Inquiries were sent to the Ministry of Finance on Thursday to comment, remained unanswered at the time of the publication. Taxpayer-friendly approach One of the changes proposed by the Select Committee is to have more taxpayer-friendly approach to provisions against avoidance aimed at combating aggressive tax planning. As a result, the panel suggested that India’s general rules for avoidance (cooked) that do not allow transactions that are mainly designed to avoid tax should be assessed in respect of the specific context of each case. The idea is to balance the strong maintenance of the terms with the protection of taxpayers. A section in the bill that is likely to receive attention from the MPs during the debate is the search and seizure provisions of officials. The provision that allows tax officers to access computers and digital systems, even their access code, in the case of non-cooperative judges, in some cases of unknown income or foreign assets, has caused concerns among professionals. During deliberations, the Ministry of Finance informed the committee that changes to the existing search provisions in the draft bill have been made to rationalize it, give tax security and reduce the litigation while making the language clear and direct. After a detailed investigation, the Select Committee accepted the provision with some changes in the draft bill proposal regarding tax officials’ powers to ignore the access code in such cases. The committee found that this does not hold any change in the law as it exists today, including judicial statements and internal circulars of the income tax division.