India To Get Simpler Income Tax Act By 2008

by Lorys Charalambous, Tax-News.com, Cyprus

12 September 2006

Indian Finance Minister Palaniappan Chidambaram announced last week that a simplified Income Tax Act replacing the current statute could be in place by 2008.

The announcement follows the submission of a report by a government-appointed panel of tax officials which suggested a number of ways in which the Indian tax code could be simplified.

Suggested changes include the removal of redundant tax provisions and the simplification of the language used in the statute so that it can be more clearly understood by taxpayers.

The report also recommends the consolidation of all existing direct taxes such as income tax, wealth tax and fringe benefit tax into one code, to be known as the 'Direct Taxes Code Bill 2006'.

The government said in a statement that it would examine the report before deciding on further action, but expects to table a bill in Parliament during the winter session.

Chidambaram also indicated that until the new bill is enacted, likely to take place in 2008, taxpayers would file under the current system as normal until the 2008/9 year of assessment.

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