The select parliament committee began its consultation on the new income tax bill on Thursday. The Institute of Chartered Accountants of India (ICAI) was the first to make its observations on the bill. According to sources, the ICAI has raised three main issues during its representation to the committee.
The governing body of chartered accountants wants the bill to be shorter by having fewer sections. The bill currently has 536 sections and the ICAI wants this to be reduced by 100. “There are many overlapping sections, which can be merged to have fewer sections,” a source told TNIE.
The other major issue raised by the institute is that the bill despite all sincere efforts is still prone to litigation. Sources told TNIE that having simpler language does not necessarily guarantee lesser litigation. Apart from these two, the ICAI feels there is need for further simplification of the law. The sources, however, did not elaborate more on the issue.
The select parliamentary committee will meet industry bodies and tax advisory firms as part of its consultation process. The committee is likely to submit its report on the bill by the start of the monsoon session.
The government is likely to incorporate some of the recommendations made by the committee and then table it in Parliament again, where it will try to get the bill passed. The new law is expected to come into force from 1 April 2026.
The new income tax bill is more about consolidation of scattered tax provisions, simplification and elimination of redundant laws than about rate or structural changes. The bill maintains the existing tax rates and leaves capital gains tax rules unchanged.