Simplifying the Income Tax Act, automating tax collection and return processing and making the process user-friendly are priorities for the National Democratic Alliance (NDA) government, finance minister Piyush Goyal said.
The Narendra Modi government, which has undertaken several measures to curb tax evasion, is working on changes to the income tax law. The initial draft is expected by the month-end, Goyal said in an interview on Wednesday.
Goyal’s emphasis on simplifying the law and making its administration taxpayer-friendly signals the future of direct tax reforms that the NDA government wants to pursue—elimination of personal interface between taxpayer and officials and, thus, the room for corruption—if re-elected.
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“We hope that the task force’s recommendation comes out quickly. We want the income tax law to be a lot simpler. I have also announced the intention for a new regime of income tax administration for which we have approved the funds. Tax assessment will be IT (information technology)-driven and be completely anonymous," Goyal said.
Once the IT systems are upgraded, which will take about two years, the department will be able to process tax returns and issue refunds on the same day. Goyal, however, declined to say whether the NDA will double the basic income tax exemption limit to ?5 lakh, if re-elected.
He had announced in the interim budget that those with taxable income up to ?5 lakh would not have to pay any tax.