Key Takeaways
- The Union Finance Minister proposes to review the Income Tax Act to make it simpler and more concise.
- The review process aims to reduce disputes and litigation, providing tax certainty to taxpayers.
- The proposed changes include merging the 5% TDS rate into the 2% TDS rate and withdrawing the 20% TDS rate on repurchase of units by mutual funds or UTI.
New Delhi: In a bid to simplify direct tax laws in the country, Union Finance Minister Nirmala Sitharaman on Tuesday announced to comprehensively review the Income Tax Act, 1961.
“The purpose is to make the Act concise, lucid, easy to read and understand. This will reduce disputes and litigation, thereby providing tax certainty to the tax payers. It will also bring down the demand embroiled in litigation,” Sitharaman said while presenting the Union Budget 2024-25 in Lok Sabha.
The FM said that the review process would be completed in six months.
The Budget also proposed to simplify the tax regime for charities, Tax Deducted at Source (TDS) rate structure, provisions for reassessment and search provisions and capital gains taxation.
Sitharaman said that the two tax exemption regimes for charities are proposed to be merged into one.
“The 5% TDS rate on many payments is being merged into the 2% TDS rate and the 20% TDS rate on repurchase of units by mutual funds or UTI is being withdrawn. TDS rate on e-commerce operators is proposed to be reduced from one to 0.1%,” she said.
