The Income Tax Act, 1961, has become complex with frequent amendments. A streamlined law can help taxpayers, businesses, and the government navigate taxation with greater clarity
The number of words has been halved to improve readability
Sections have been reduced from 819 to 536, and all deductions for salaried taxpayers are now consolidated under one section
The Central Board of Direct Taxes (CBDT) will introduce a Charter for Taxpayers to enhance trust, reduce disputes, and improve compliance
Terms like ‘assessment year’ and ‘previous year’ are replaced with ‘tax year’ for clarity. The Bill also clearly defines virtual digital assets (VDAs) and their taxation rules
It is set to take effect from April 1, 2026
With 544,000 pending appeals and over Rs 10 trillion in disputed taxes, the Bill’s success will depend on its ability to reduce litigation and improve efficiency
Despite no tax up to Rs 12 lakh per annum, the system still has seven slabs. A truly simplified structure should have three slabs, making taxation clearer and more efficient