Income Tax Filing Rules: It may become very easy for taxpayers to file income tax return in the coming days. The central government is preparing to make income tax return filing rules very easy and simple. The government is very worried about the increasing tax disputes and tax cases worth about $ 120 billion are under dispute. The Central Board of Direct Taxes i.e. CBDT has also formed an internal committee to review the Income Tax Act 1961. 

Draft report will be released for public consultation 

According to a Bloomberg report, the CBDT committee is continuously deliberating to review the proposed Income Tax Act 1961 Act and it is believed that a draft report can be issued for public consultation by mid-January 2025. People associated with this matter told Bloomberg on the condition of anonymity that this information has not been made public yet and the government can release about the proposed bill in the budget to be presented on February 1, 2025. 

The language of the Income Tax Act will be simplified

According to the report, along with simplifying the language of the Income Tax Act, information related to formulas and tables can be rationalized but there will be no mention of tax rates and policies. The Finance Ministry has not responded to the email sent on this news. 

Government troubled by tax disputes 

The Indian government has been modernizing its tax laws for decades to reduce the bureaucratic burden on taxpayers and improve compliance. Despite this, the tax dispute case has doubled to Rs 10.5 lakh crore or $123 billion. While presenting the budget for the financial year 2024-25 in July, Finance Minister Nirmala Sitharaman had announced a comprehensive review of income tax laws within six months and promised to make it taxpayer-friendly.    

Tax year instead of assessment year

The possible changes that are expected in the Income Tax Act include replacing complex income commutation structures with formulas. The current practice of calling financial year and assessment year under tax laws will be changed and it will be defined as tax year. It will be explained through tabular format for easy understanding by taxpayers. Apart from this, the number of additional forms for filing tax returns will be reduced.  

Taxpayers do not need a CA

Earlier on Income Tax Day, the Finance Minister had advised the officials that they need to be faceless, fair and friendly with the taxpayers. He had asked to make the language of the notices sent by the department to the taxpayers simple and non-technical so that the taxpayers can understand easily and they do not have to hire a lawyer to answer the tax department. The Finance Minister said that we should talk to our taxpayers in very simple language.