NEW DELHI: The Income Tax Bill has failed to live up to the hype that it created, feels a section of tax analysts and chartered accountants. They feel what was seen as an exercise to revamp the 65-year-old Income Tax Act has not yielded the kind of result they were expecting.
“Expectations were quite high but at the moment this seems to be an attempt to keep the law same and only improve overall structure,” says Gaurav Makhijani, senior Tax Advisor, Roedl & Partner.
He says that less technical language has been introduced in certain sections, such as replacing "notwithstanding" with "irrespective," which enhances clarity and readability. However, he feels, that while these adjustments improve the accessibility of the law, the core intent and scope of India’s tax framework remain largely unchanged.
Anand Bathiya, president, Bombay Chartered Accountants’ Society, is less kind in his assessment of the Bill. “Being an attempt to revamp after 65 years, the expectation was of a contemporary novel code including newer concepts like group taxation, carry-back of losses, etc. But it seems the wait will be longer,” he says.
According to him, the Bill seems to be a bunch-up and clean-up, old wine in new bottle exercise. “The form gets simpler with no major changes to affect the substance.”
The Income Tax Bill gives a sense of nuts and bolts process reforms that are not as transformational as large substantive changes or amendments, feels Sandeep Jhunjhunwala, M&A Tax Partner at Nangia Andersen LLP.
The new bill has 23 chapters divided into 536 sections and 16 schedules, over 600 pages. The existing Income Tax Act has 23 chapters, 298 sections and 14 schedules spanned over 830-odd pages.
Lokesh Shah, Partner, IndusLaw, says based on an initial review, the new Income Tax Bill does not seem to introduce any significant changes to the charging provisions, computation methods, or assessment procedures.
“Several provisions within a section have been restructured into separate sections,” he says.
The government had already hinted at no structural or rate changes. In an interaction with TNIE, revenue secretary Tuhin Kanta Pandey had said there are no surprises in terms of tax rates or basic structure, which he said would not be any different from what the finance minister has already announced.