The Centre is working on a complete review of the Direct Tax Code, which would be prepared by an internal committee and shared with stakeholders within the next six months, said Sanjay Malhotra, Secretary Revenue, Ministry of Finance, on Thursday.
“We will conduct a consultation process and decide how it will take place. “We would like to take a collaborative approach to implementation,” he said at an event hosted by the Federation of Indian Chambers of Commerce and Industry.
Malhotra stated that the exercise is not related to the implementation of a new Direct Tax Code, but rather to a complete review of the income tax legislation. Finance Minister Nirmala Sitharaman declared in her Budget on Tuesday that the Centre will conduct a complete review of the Income-tax Act of 1961.
“The goal is to make the Act succinct, clear, and easy to read and understand. This will minimize conflicts and litigation, giving taxpayers greater tax certainty. It would also cut down the demand that is now being litigated,” Sitharaman added. She also stated that the Centre will develop a standard operating system for defaults in Tax Deducted at Source, as well as simplify and justify the compounding of such violations.
On Thursday, Malhotra stated that the Centre will aim to deliver a “hassle-free, simple,” and collaborative approach to tax implementation.
“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 collects them in a smooth and hassle-free manner,” he said.
He also stated that the Budget’s overarching goal was to simplify tax processes.
