Will new income tax bill increase tax burden? What taxpayers can expect from it? The government has said the new income tax bill is being brought to simplify the changes and reduce the litigation. However, should the taxpayers be worried about changes in the income tax slabs and tax rates?
The new income tax bill will soon be tabled in the Parliament. The media reports suggest that once the new bill is tabled by Finance Minister Nirmala Sitharaman, it will likely be sent to the Standing Committee for Finance for review. The new income tax bill is being brought to simplify the language of the income tax laws, remove the redundant and obsolete provisions and reduce the litigation.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} However, can the new income tax bill increase tax burden on taxpayers? Apart from simplification of language, what other things taxpayers can expect from the new income tax bill?
Also Read: What is new income tax bill, 2025?
Will you pay higher tax due to new income tax bill?
Munjal Almoula, Head of Tax, BDO India - a consulting firm says, "The objective of the new tax bill is to do away with redundant provisions and to simplify the language of the Tax Law with a view to make the Income Tax Act more succinct and easier to comprehend. Keeping this objective and the directionality in mind, it is unlikely that the new tax bill will introduce new tax provisions or amend existing tax rates. Hence, I do not expect any additional tax burden being cast upon taxpayer through the new tax bill."Gouri Puri, Partner, Shardul Amarchand Mangaldas & Co. says, "The new income tax bill should not increase the burden on taxpayers. The new bill is not meant to be a change in tax slabs policy."
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What can taxpayers expect from new tax bill?
Almoula says, "It would be reasonable to expect a simpler compliance mechanism, greater transparency as regards approach and directionality on tax assessments and a quicker and more efficient refund mechanism."Puri says, "From the new income tax bill, it is expected that it will consolidate concepts of deemed accrual and accrual for taxing the income of non-residents. There can be a single set of clear source rules for taxing foreign enterprises. The new income tax bill can bring updated tax rules allowing tax-neutral treatment for business reorganizations (wider scope to include business and asset transfer and share swaps) where there is continuity of ownership interest and business. The new legislation can scale back on the deemed income rules under section 56 when not aligned with commercial reality."
Rohinton Sidhwa, Partner, Deloitte India says, "There is a need for simplification of law especially on removal of obsolete provisions such as 80HHC, 80J, 80JJ, 80K, 80L, etc. In case of existing litigation on such matters, old law could be referred to for interpretation. There is also a need to simplify rules and forms such as safe harbour rules, forms to be filed along with the return of income, etc. The new bill should introduce the concept of one single 'tax year' instead of the existing concept of 'financial year' and 'assessment year'. The provisos and explanations etc. must be replaced with simple and concise language in paragraph format.
He further adds that new bill should bring a mechanism to incorporate the key Supreme Court decision on settled issues. There should be clear computational provisions such as interest on delayed payments and receipts. There should be issuance of separate technical guidance incorporating examples to reduce interpretational issues. The legislation should rationalise the prosecution and penal provisions for minor defaults e.g. thresholds to be introduced for levy of penalty or prosecution, etc.
How new tax bill will help the taxpayers?
Puri says, "Simplified tax rules should promote ease of doing business in India and facilitate value-enhancing transactions, that will then spit economic growth. A simple tax system also augments compliance rates and is more equitable."Sidhwa says, "The new income-tax bill will provide clarity, thereby reducing litigation time-cost involved. It will also boost investor confidence, thereby promoting foreign investment. The bill is also expected to reduce compliances, thereby encouraging voluntary compliance by taxpayers and ease of doing business.
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This story originally appeared on: India Times - Author:Faqs of Insurances
