Income Tax Act review attempts to make 'bulky' laws 'simpler' for taxpayers: CBDT Chairman

In Union Budget 2024, Finance Minister Nirmala Sitharaman announced that the government will undertake a comprehensive review of the Income Tax Act, 1961. Now, Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal has revealed the rationale behind this move.

Agarwal said that the Income Tax Act would be comprehensively reviewed to simplify the "bulky" law and make it "simpler" to understand and comfortable for taxpayers, in addition to aligning new technology processes with it.

The Income Tax Act, which started its journey in 1922, has 298 sections, 23 chapters and other provisions in its current form of 1961.

In a conversation with news agency PTI, he said, "The taxpayers also feel that the Act is not so simple, as it ought to be...it is cumbersome...so the attempt is if we can make this Act simpler, simpler to comprehend, simpler in terms of language, simpler in terms of presentation, then that hitch of the taxpayer to actually not see the Act and take the help of a tax practitioner or someone (maybe eased)..."

"We are working towards how can we make it (Income Tax Act) simple so that the taxpayer feels comfortable seeing the provisions himself or herself and that it is more user friendly," the CBDT chairman added.

He also noted that technology is now an integral part of tax administration, and "we have to see where the gaps are and how we actually can align technology with the provisions of the Act. We are looking to undertake further improvements (in the law)."

ITR 2024

Last year, a total of 6.77 crore ITRs were filed by July 31, 2023.