Key Highlights and Basic Structure of New Income Tax Bill, 2025 скачать в хорошем качестве

Key Highlights and Basic Structure of New Income Tax Bill, 2025

Key Highlights and Basic Structure of New Income Tax Bill, 2025 The Hon’ble Finance Minister in the budget speech in July 2024 stated that the purpose of the comprehensive review of the Income-tax Act, 1961, is to make the Act “concise, lucid, easy to read and understand. Following ground rules have been considered for simplifying the existing provisions: a. The Bill proposes to eliminate redundant provisions, reducing its length by nearly half. b. The drafting style of the new Bill is straightforward and clear, making the provisions easier to understand by incorporating more than 57 tables compared to 18 tables in the Income-tax Act, 1961. Sub-sections and clauses have been used, instead of relying on provisos and explanations for exceptions and carve-outs. This minimises cross references and conflict by aggregating all applicable provisions related to a single scenario in one place. c. All provisos (about 1200) and explanations (about 900) have been removed. d. The 1961 Act contains numerous cross-references to sections, sub-sections, clauses, sub-clauses, items, and sub-items, making the provisions challenging to interpret. The new Bill adopts a simplified reference system, allowing provisions to be cited by simply mentioning the section. For instance, section 133 (1)(b)(ii) in the new bill would indicate sub-clause (ii) of clause (b) of sub-section (1) of section 133 in the existing Act. This change makes the Act's language easier to understand. e. A significant aspect of the Bill is the elimination of the concepts of ‘previous year’ and ‘assessment year’. Prior to 1989, the concept of ‘previous year’ and ‘assessment year’ had been brought because the taxpayers could have different twelve-month previous years for each source of income. From 1st April 1989, previous year was aligned to a financial year in all cases. However, ‘assessment year’ continued to be used for various proceedings under the Act. Thus, a taxpayer was required to track two different periods, i.e., the ‘previous year’ as well as the ‘assessment year’. This presented difficulties in complying to the provisions of the Act especially for a new taxpayer who had to keep track of ‘previous year’, ‘assessment year’ as well as ‘financial year’. Queries if any are invited at our email address: OFFICE@SHARKAUDITORS.COM Best Regards Suresh Wadhwa, LL.B., FCA C-307, Noida One Building, Plot No. B-8, Paramhansa Yogananda Marg, Sector 62, Noida, 201309 T: +91 9717 00 2510 | 87006-04006 | E: office@sharkauditors.com