The new Income Tax Bill is a big step towards tax reform. With its implementation, the rules and laws of the 65-year-old Income Tax Act, 1961 will be abolished. The language of the new Income Tax Bill is quite simple. The sentences are short. Those provisions have been abolished, which are no longer needed. The most important thing is that the definition of virtual digital asset has been fixed in the new bill. This will end the confusion regarding the tax rules on cryptocurrency. The government had said three years ago that it would announce comprehensive rules and laws for virtual digital assets.
Akhil Chandna, Partner (Global People Solutions Leader), Grant Thornton India, said, "The new Income Tax Bill has introduced tax slabs and slabs in the table. Emphasis has been laid on digital compliance. The process of income tax return filing, dispute resolution and assessment has been simplified. This will reduce cases of tax-related disputes." The new Income Tax Bill has 2.56 lakh words. This is about 50 percent less than the current Income Tax Act. It has about 5 lakh words.
Experts say that the structure of capital gains tax has not been changed in the new income tax bill. Despite simplifying the language and reducing the number of words, the tax rules have not been changed. There are 67 such clauses in the new bill which have provisions for capital gains. Clause 196 talks about short term capital gains. Clause 197 talks about the tax rules on long term capital gains.
Tax experts say that the government has already clarified that the aim of the new income tax bill is to simplify the language of the rules. There is no proposal to change the tax rates on different types of income. The government believes that simplifying the language of tax rules will increase people's interest in compliance.
Currently, in a country with a population of more than 150 crore, only 8 crore people file income tax returns. Out of these, about 5 crore people do not pay tax. They only file income tax returns. This means that the number of such people who pay income tax to the government is only 3 crore.
