A Future-Ready Tax Bill: Fewer Rules, Simpler Language and a New Tax Year

The new tax bill and charter aim to bring reforms rooted in both transparency and justice

- SONU IYER

The long-awaited bill for the new tax code was tabled in Parliament on Thursday. The bill fulfills the finance minister's commitment to provide an income tax law that is straightforward for taxpayers and tax administrators, aiming to establish tax certainty and reduce litigation. The bill is a culmination of amendments incorporated in successive budgets since the idea of a Direct Tax Code 2010 was floated in 2009. It aims to maintain relative stability in the well-understood provisions of existing income-tax law while simplifying it after a comprehensive review making it "concise, lucid, easy to read and understand".

The FAQs issued for the new bill emphasize that the international experience of countries like the UK and Australia, which have undertaken similar exercises, i.e., writing a new tax code, has been duly considered to ensure linguistic simplification as well as structural rationalization.

As promised, on the first flush, the new income tax bill is direct in text, replacing multiple provisos and explanations with clearly enumerated sub-sections and clauses. Redundant provisions in the current law have been done away with, and the language has been simplified, substituting seemingly pompous words with simpler words. The flow of the law has been rearranged to make it easier to navigate and read chapters, while deductions and exemptions have been moved into schedules and tables.