Manish Tewari slams New Income Tax Bill, calls it more complex than existing law

Congress MP Manish Tewari criticized the new Income Tax Bill, calling it more complex than the existing law. Despite claims of simplification, the bill expands sections and schedules.

Congress MP Manish Tewari on Thursday criticized the proposed new Income Tax Bill, arguing that it is far more complex than the existing law, despite Union Finance Minister Nirmala Sitharaman’s claims that it would simplify taxation.

"The Union Finance Minister had stated that the new Income Tax Bill would be simpler than the previous one. However, the old law had 296 sections, while the new one has over 500. Additionally, the number of schedules has increased from five to 14," Tewari told ANI. He asserted that instead of streamlining the tax system, the bill introduces more complexity.

New Income Tax Bill to be introduced in Lok Sabha

The government is set to table the new Income Tax Bill in the Lok Sabha on Thursday. The Union Cabinet cleared the draft legislation last week, and the Centre is expected to conduct detailed consultations before finalizing it.

The bill is likely to be referred to a Select Committee for further scrutiny. Sitharaman had previously indicated that after the committee’s recommendations, the government would review potential amendments before finalizing the law.

Government’s push for tax reforms

In the July 2024 Budget, the government proposed a comprehensive overhaul of the Income-tax Act of 1961, aiming to simplify the law, make it more concise, and reduce tax-related disputes and litigation.

During her budget speech on February 1, Sitharaman reiterated the government’s commitment to taxpayer-friendly reforms. She highlighted key initiatives introduced over the past decade, including:

• Faceless assessment to minimize direct interactions between taxpayers and officials.
• The Taxpayers' Charter, ensuring rights and responsibilities are clearly defined.
• Faster tax refunds for improved efficiency.
• Self-assessment dominance, with nearly 99% of returns filed without scrutiny.
• The Vivad se Vishwas scheme, designed to resolve tax disputes amicably.
• "Continuing these efforts, I reaffirm the commitment of the tax department to trust first, scrutinize later. I also propose to introduce the new Income Tax Bill next week," she had stated in her speech.

With opposition leaders questioning the bill's complexity and the government insisting on its necessity, its progress through Parliament will be closely watched.