Income Tax Act Review and Pre-Budget Memorandum, 2025: ICAI invites Suggestions

The Institute of Chartered Accountants of India ( ICAI ) has called upon its CA members and other stakeholders to submit suggestions for a comprehensive review of the Income Tax Act, 1961.

This initiative follows the announcement made by the Finance Minister Nirmala Sitharaman during the Union Budget 2024-25 presentation, highlighting the need to simplify the language of the Act to make it more concise, lucid, and user-friendly.

The proposed overhaul aims to reduce disputes and litigation, thereby decreasing the backlog of cases and fostering a more efficient tax environment. A committee at the Central Board of Direct Taxes ( CBDT ) level has been established to spearhead this initiative.

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On September 18, 2024, a stakeholder consultation was held under the chairmanship of the Revenue Secretary, Ministry of Finance, where the ICAI submitted its preliminary suggestions.

The Institute of Chartered Accountants of India is a statutory body established under an Act of Parliament for regulating the profession of Chartered Accountants in India.

Categories for Suggestions

1. Simplifying the Language of the Income-tax Act, 1961: Recommendations to make the Act's language more straightforward and accessible.

2. Mitigating Litigation and Providing Tax Certainty: Suggestions aimed at reducing legal disputes and offering clearer guidelines for taxpayers.

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3. Reducing Compliance Burden: Ideas to streamline processes and lessen the administrative load on taxpayers.

Members and stakeholders are encouraged to submit their inputs through the following link: Suggestions for comprehensive review of the Income-tax Act, 1961/Pre-budget memorandum.

Access Official Announcement Here: Announcement for inviting suggestions on Comprehensive Review of the Income-tax Act, 1961 and Pre-budget Memorandum, 2025

When submitting suggestions, contributors should:

- Specify the relevant section or rule of the Income-tax Act, 1961, or Income-tax Rules, 1962.

- Identify specific issues related to the provision.

- Provide clear suggestions with a coherent rationale for the proposed change.

Suggestions related to provisions applicable to International Financial Services Centre ( IFSC ) entities are also welcome.

Pre-Budget Memorandum 2025

In addition to the Act's review, the ICAI's Direct Taxes Committee is preparing the Pre-Budget Memorandum for 2025. The committee seeks suggestions on direct tax laws, including international taxation, under the following headings:

1. Widening the Tax Base and Increasing Tax Revenue: Strategies to enhance tax collection and expand the taxpayer base.

2. Checking Tax Avoidance: Measures to prevent tax evasion and ensure compliance.

3. Rationalising Provisions of Direct Tax Laws: Recommendations for making tax laws more logical and equitable.

4. Removing Administrative and Procedural Difficulties: Solutions to simplify tax administration and reduce procedural complexities.

Stakeholders can submit their pre-budget suggestions via the same online portal: Suggestions for comprehensive review of the Income-tax Act, 1961/Pre-budget memorandum.

Submission Deadline

All suggestions for both the comprehensive review of the Income-tax Act and the Pre-Budget Memorandum must be submitted by October 15, 2024.

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