CBDT's Comprehensive Review of Income Tax Act, 1961: Simplification and Modernization Ahead
The CBDT is reviewing the Income Tax Act, 1961, to simplify language, reduce litigation, and modernize tax laws. Expected changes include streamlined processes, updated provisions, and improved compliance, with proposals likely to be presented in Budget 2025.

CBDT's Comprehensive Review of Income Tax Act, 1961: The Central Board of Direct Taxes (CBDT) is undertaking a significant overhaul of the Income Tax Act, 1961, with the aim of modernizing, simplifying, and aligning it with contemporary global practices. Announced by Finance Minister Nirmala Sitharaman in the Union Budget 2024-25, the initiative is poised to bring transformative changes to India’s tax landscape.
Key Objectives and Scope
Simplifying the language of the Act to make it more accessible.
Reducing litigation by removing redundant and ambiguous clauses.
Enhancing compliance by streamlining procedures and adopting best global practices.
The goal is to ensure a user-friendly tax administration system while fostering ease of doing business.
Public Participation and Suggestions
The CBDT has invited public feedback on improving the Act, emphasizing
Simplification of tax laws.
Reducing litigation and compliance burdens.
Submissions were facilitated through a dedicated webpage on the e-filing portal, ensuring inclusivity in the reform process.
Formation of Specialized Committees
An internal committee, chaired by V K Gupta, Chief Commissioner of Income Tax, has been established to oversee the review.
22 sub-committees have been formed to address various aspects of tax law, covering everything from outdated sections to procedural complexities.
Expected Changes
The proposed amendments may include
Removal of obsolete provisions.
Simplification of tax filing processes.
Adjustments to tax slabs for better alignment with economic realities.
Introduction of measures to reduce litigation and streamline reassessment procedures.
Timeline and Anticipated Impact
The review is set to be completed by January 2025, with the proposed changes likely to be presented during the Union Budget 2025 session.
This overhaul aims to create a tax system that
Enhances tax compliance.
Reduces disputes.
Provides greater certainty to taxpayers.
Aligns with modern economic practices, promoting economic growth and ease of doing business.