In the Union Budget 2025 India set to simplify its decades-old income tax filing rules
Union Budget 2025 – The Indian government is taking steps to simplify its income tax filing rules in order to ease the burden on taxpayers and reduce the number of disputes that have reached over $120 billion in the past decade.
A proposed overhaul of the Income-tax Act of 1961 is currently in the final stages of preparation and is expected to be open for public consultation around mid-January. The revised legislation will then be officially released in the government’s budget, which is anticipated in early February.
The changes will involve simplifying the language and streamlining information through the use of formulas and tables. It is important to note that there will be no adjustments to tax rates or policy as part of this revamp.
The Finance Ministry has not yet responded to requests for comment on these proposed changes.
India has long been working towards modernizing its tax laws to make them more user-friendly and to increase compliance. Tax disputes have more than doubled to 10.5 trillion rupees ($123 billion) in the decade leading up to the fiscal year ending in March 2023. Finance Minister Nirmala Sitharaman announced in July that a comprehensive review of tax legislation would be completed within six months to make the rules more taxpayer-friendly.
Some of the proposed changes include:
– Replacing complex income computation structures with formulas
– Introducing a single definition of the tax year to replace the current practice of assessment year and financial year
– Using tabular depictions for easier understanding by taxpayers
– Reducing the number of additional forms required for tax returns and making them available online.
For more market insights, follow our blog.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like ET, NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.