Income tax rules should be eased, but not overly

The Centre's rule proposals are broadly welcome, especially their effort to ease the filing of income tax returns, but lifting the current cap on PAN-free transactions is not a good idea

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The draft income tax rules released by India’s government for public comments are a marked improvement on what's currently in force.

For one, the number of rules and forms will almost be halved. For another, information requests that have become redundant will be done away with. Some forms are being merged. Many more income tax filers will have an easier time filing their returns—they will only be required to edit or okay the pre-filled form they are presented. While this facility is not new, the categories of taxpayers who can avail of it would widen, although they might need to spend some time on amending the pre-filled data, given the more complex transactions they make. The real hallmark of reform would be when someone with multiple streams of income, including from overseas, no longer needs the help of a professional accountant to file tax returns. That day may come, but has not dawned yet.