When a boss assigns a target with a fixed timeline, it creates a significant amount of pressure to deliver results. This scenario is not limited to the private sector; it also applies to government ministries where officials work based on directives from their ministers. Recently, Finance Minister Nirmala Sitharaman set a challenging target for her ministry, asking for a critical task to be completed within six months, which has spurred officials into action.
During the presentation of the 2024-25 full budget last month, Finance Minister Nirmala Sitharaman announced the government’s initiative to simplify direct taxation in India. To achieve this, the government aims to review the Income Tax Act of 1961 within a six-month timeframe. Consequently, officials from the Central Board of Direct Taxes (CBDT) are currently fully engaged in this review process.
Statements from CBDT Chairman
The Chairman of the CBDT, Ravi Aggarwal, expressed confidence that the review of the Income Tax Act of 1961 will be completed within the stipulated six-month period. Given that the CBDT oversees the Income Tax Department, any policy changes or updates will ultimately be decided by them.
Objectives of the Review
According to Chairman Aggarwal, the CBDT’s team is handling a significant task involving the review of the Income Tax Act. The primary objectives of this review are to reduce tax-related litigation in the country and provide relief to taxpayers. Aggarwal noted that the CBDT has started working in mission mode to accomplish this important task. He acknowledged the challenges involved but emphasized the potential for transformative change.
Introduction of New Income Tax Return System
Chairman Aggarwal also mentioned that the new income tax return filing system, which was introduced a few years ago, has been well-received by the public. Approximately 72% of taxpayers have opted for this new system. As of the deadline on July 31, a total of 58.57 lakh individuals filed their income tax returns for the first time. To date, under the faceless system, a total of 6.76 lakh income tax assessments have been completed, and 2.83 lakh appeals have been finalized by the end of July.
Conclusion
The push for reviewing the Income Tax Act of 1961, as mandated by Finance Minister Nirmala Sitharaman, represents a significant step towards tax reform in India. By prioritizing a systematic review aimed at reducing litigations and easing the filing process for taxpayers, the government is taking necessary measures to enhance compliance and support a more efficient tax system. As the CBDT accelerates its efforts, all eyes will be on the outcomes of these reforms in the coming months.
