New Income Tax Bill Shows Predictability, Stability, Continuity: EY's Pranav Sayta
Sayta says the bill is largely in line with expectations.
The changes in the New Income Tax Bill, tabled by Finance Minister Nirmala Sitharaman in the Lok Sabha on Thursday, has attempted to simplify the structure, according to Pranav Sayta, partner and national leader of the international tax and transaction services practice at EY India.
"I think the simplification is a good attempt, almost half the words that the current law has," Sayta said.
The minister's motion to form a select committee on the bill, was passed by the House as well. The select committee will submit its report by the first day of the next session.
"Stability is a good thing, we don't want unnecessary disruptions. More or less similar, no substantial changes. So I think its good news as it shows predictability, stability and continuity. On the whole, it was a good step," he said.
There was no significant change and nothing was adverse to the taxpayer. The bill has not introduced any new taxes but has only put together the taxability provisions provided in the previous act, he said.
As per the announcement during the budget, income up to Rs 12 lakh is now exempt from taxation, with a standard deduction of Rs 75,000, effectively making income up to Rs 12.75 lakh tax-free for salaried individuals.
"By large, they have tried to streamline the provisions, simplify the law and make it without redundancies. Nothing significantly adverse on the assessment front," he said.
When it comes to expectations around the new bill, Sayta said the bill is largely in line with expectations.
"There was never an attempt to change the law. Only aim was to simplify and remove redundancies," he said. And talking about issues that the bill could have addressed better, Sayta highlights the disputes and litigations area.
"One could have seen a little more on better dispute resolution to reduce litigation. Could have been more on the dispute resolution front to bring down resolution, still nothing adverse in that sense," he said.
In terms of improvements that the new bill has brought about, Sayta said that confusion around the time frame of the tax structure is clearer.
"They have done a good thing by doing away with the previous year and assessment year and coming up with the concept of one tax year. This has caused confusion in the past. This is a really a good step in terms of simplifying the conceptual framework of the tax structure," he said.
The newly tabled bill is 622 pages long with 536 sections, 23 chapters and 16 schedules. The bill simplifies the existing languages of the existing Income Tax Act of 1961. The earlier tax act had 298 sections and 14 schedules. The new law will come into effect from April 2026 and the rules will come to place once the act is notified.
