In the latest union budget presentation, Finance Minister Nirmala Sitharaman unveiled a series of tax reforms designed to ease the taxation load on a vast majority of income taxpayers. By increasing the income tax slabs and offering a notable rebate for incomes up to Rs 12.75 lakh annually, the government is set to lower the effective tax burden for many salaried individuals. Alongside these measures, the minister announced that a new Income Tax (IT) bill will soon be presented to Parliament, aiming to streamline the tax filing process by reducing unnecessary complications.
Tax experts have welcomed these initiatives, predicting a surge in the number of taxpayers as the simplified tax structure encourages many to switch to the new regime. Ved Jain, an experienced tax analyst, noted that the reforms could propel the taxpayer base from around 8.5 crore to 10 crore, as economic prosperity is likely to boost individuals’ income levels. Rakesh Nangia also pointed out that while many who file returns do not actually pay tax, the shift towards middle-income taxpayers will increase actual tax contributions over time.
The proposed overhaul of the IT Act is another key component of the budget, slated to remove excessive details currently spread over 298 sections and numerous subsections. Experts expect the new IT Act to be significantly shorter and more user-friendly, with plans to cut the current document's length in half. Such simplification is anticipated to reduce tax disputes and litigation, further relieving common taxpayers and bolstering overall tax collection in the upcoming financial year.