Cabinet approves Income Tax Bill, expected to be tabled next week

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Friday approved the Income Tax Bill, sources told CNN-News 18.

Following the approval, the bill is expected to be tabled in the parliament in the coming week, possibly as early as Monday.

The CNN-News 18 reported that the bill could be referred to the Parliamentary Standing Committee on Finance for broader consultation.

In her Budget speech, Sitharaman said that she would introduce a new income tax will as a reaffirmation of the “commitment of the tax department to ’trust first, scrutinise later’". The Narendra Modi government has pitched the exercise as part of an outreach to the middle class that comprises tax breaks and simplification of tax-collection and filing.

The bill will replace the Income Tax Act of 1961. It intends to simplify the language to make tax compliance easier for taxpayers and make it easier to read and understand the provisions.

While the specifics of the bill are not known, Union Finance Secretary Tuhin Kanta Pandey told Moneycontrol earlier this week that it will not include any new taxes but bring structural reforms. He added that, once passed, the bill will come into effect on April 1.

“It will not change in that because that will be the prerogative of the tax policy. But structurally, it undergoes a massive change. The way it reads, the way it connects, the way it is understood. And the way the redundancy is removed. So, rationalisation and simplification exercises will follow in that. But some of the key things, reforms have also been brought in here,” said Pandey.