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Budget 2025: The federal government is most likely to present a brand-new earnings tax obligation costs to streamline the present I-T legislation, make it understandable and lower the variety of web pages by around 60 percent.
The brand-new earnings tax obligation legislation will certainly be a brand-new legislation and not a modification to the existing Act, states a record.
In the upcoming Budget 2025 session of Parliament, the federal government is most likely to present a brand-new earnings tax obligation costs to streamline the present I-T legislation, make it understandable and lower the variety of web pages by around 60 percent, information firm PTI has actually reported.
“The brand-new Income Tax legislation will certainly be presented in the Budget session ofParliament It will certainly be a brand-new legislation and not a modification to the existingAct Currently, the draft legislation is being vetted by the legislation ministry and it is most likely to be generated Parliament in the 2nd fifty percent of the Budget session,” according to the PTI report citing a source.
The Budget session is scheduled from January 31 to April 4. The first half (January 31-February 13) will start with President Droupadi Murmu’s address to the joint sitting of Lok Sabha and Raya Sabha followed by the tabling of the Economic Survey for 2024-25. The Union Budget for 2025-26 will be presented on February 1. Parliament will reconvene on March 10 and will sit through April 4.
Sitharaman in her July Budget had announced a comprehensive review of the six-decade old Income Tax Act, 1961, within six months.
Pursuant to the Budget announcement by Sitharaman for a comprehensive review of the I-T Act, 1961, the CBDT had set up an internal committee to oversee the review and make the Act concise, clear, and easy to understand, which will reduce disputes, litigation, and provide greater tax certainty to taxpayers. Also, 22 specialised sub-committees were established to review various aspects of the Act.
Public inputs and suggestions were invited in four categories — simplification of language, litigation reduction, compliance reduction, and redundant/obsolete provisions.
The Income Tax Department has received 6,500 suggestions from stakeholders on review of the Act.
Sources said the provisions and chapters will be significantly reduced and the obsolete provisions will be deleted.
The Income Tax Act, 1961, which deals with imposition of direct taxes — personal I-T, corporate tax, securities transaction tax, besides gift and wealth tax — currently has about 298 sections and 23 chapters.
“The effort is to cut down the volume by about 60 per cent,” the resource included, according to the PTI record.
Sitharaman had actually claimed in her July, 2024, Budget speech that the function of the evaluation is to make the Act succinct, lucid, simple to check out and comprehend.
This will certainly lower disagreements and lawsuits, thus offering tax obligation assurance to taxpayers. It will certainly likewise reduce the need involved in lawsuits. It is suggested to be finished in 6 months, she had actually claimed.
Budget 2025: Income Tax Expectations
There are different assumptions from the Budget 2025 on the earnings tax obligation front.
According to records, the federal government is most likely to give alleviation to those people gaining approximately Rs 15 lakh each year, consisting of boosting common reduction limitation to Rs 75 lakh, increasing in the fundamental exception limitation from Rs 3 lakh to Rs 5 lakh, and improving 80C reduction limitation.
The records state that the federal government could likewise present a different earnings tax obligation piece for those gaining over Rs 25 lakh.
