Government to Revamp Income Tax Act and Introduce DPI Apps for Various Sectors

The government has announced a comprehensive review of the Income Tax Act to simplify its readability. Alongside, Finance Minister Nirmala Sitharaman disclosed that SoP for TDS defaults will be introduced, and tax exemption regimes for charitable trusts will be merged. DPI apps for multiple sectors will also be developed.

The government revealed plans to undertake a comprehensive review of the Income Tax Act, aimed at making it easier to understand. This announcement came during the presentation of the Union Budget for 2024-25 by Finance Minister Nirmala Sitharaman.

Sitharaman also said that the government would introduce a standard operating procedure (SoP) for tax deducted at source (TDS) defaults, and simplify and rationalise the compounding of such offences. Additionally, two tax exemption regimes for charitable trusts will be merged into one.

She noted that 58 per cent of corporate tax revenue came from the simplified tax regime in FY23, and more than two-thirds of individuals are now availing of the new income tax regime. Furthermore, the government plans to develop DPI apps for credit, e-commerce, education, health, law, MSME service delivery, and urban governance.

(With inputs from agencies.)