During a Federation of Indian Chambers of Commerce & Industry's (FICCI) interactive session on Union Budget 2024-25' today, Sanjay Malhotra, Revenue Secretary at the Ministry of Finance announced the government's plans for a comprehensive review of the Direct Tax Code. This review will be prepared by an internal committee and is expected to be shared for stakeholder consultation within the next six months.
“We will have a consultation process and how it will happen that we will decide. We would like to have a collaborative approach for implementation,” Malhotra said.
Elaborating on the government's approach to tax revision, the Revenue Secretary said the government will continue to work to provide a hassle-free, simple, and collaborative system.
“Our approach towards taxation has always been and will continue to be in the mode of collaboration and not confrontation. The purpose of our proposals, both on the policy side as well as on the implementation side, is to collect taxes from wherever they are due but do it in a manner that gives respect, and trust to the taxpayers and collect them in a smooth and hassle-free manner,” Malhotra added.
On the Union Budget, Malhotra said the abolition of the angel tax, decriminalisation initiatives, and reduction in duties are some of the budget proposals on the indirect tax front that will benefit industries.
Direct Tax Code
A new Direct Tax Code (DTC) has been in demand that simplifies tax laws, aligning it with international standards. Many key proposals for DTC such as restructuring capital gains tax and simplifying tax deducted at source have already been undertaken in the Union Budget 2024-25.
Finance Minister Nirmala Sitharaman in the Union Budget 2024-25 announced the government's plan to conduct a thorough review of the Income Tax Act to make it more reader-friendly. "I am now announcing a comprehensive review of the Income-tax Act, 1961. The purpose is to make the Act concise, lucid, and easy to read and understand. This will reduce disputes and litigation, thereby providing tax certainty to the taxpayers. It will also bring down the demand embroiled in litigation. It is proposed to be completed in six months. 138. A beginning is being made in the Finance Bill by simplifying the tax regime for charities, TDS rate structure, provisions for reassessment and search provisions and capital gains taxation," she said.
Also on the indirect tax front, Sitharaman said, "I propose to undertake a comprehensive review of the rate structure over the next six months to rationalise and simplify it for ease of trade, removal of duty inversion and reduction of dispute."
