Parliamentary panel flags compliance glitches on new income tax act, seeks more data from CBDT
A parliamentary committee has identified compliance issues with the new Income Tax Act. They are seeking detailed data from the CBDT on its overall impact. The committee wants to understand changes in taxpayer numbers and revenue collection. Technology-driven tax processes and faceless decisions also presented certain challenges. Further discussions are planned with tax authorities to address…
New Delhi: The Parliamentary Standing Committee on Finance has identified compliance-related issues in the execution of the recently enacted Income Tax Act and is requesting additional data from the Central Board of Direct Taxes (CBDT) regarding its repercussions, encompassing tax revenue growth, taxpayer count, and ongoing legal disputes.
The committee, led by Bhartruhari Mahtab, convened on Thursday to examine Direct Tax Reforms: Simplification, Rationalization, and Ease of Compliance alongside officials from the Ministry of Finance's Department of Revenue and the CBDT. Mahtab informed ANI that the Income Tax Act 2026 commenced on April 1, and the committee sought to gauge the consequences of the modifications after five months.
He stated that the committee inquired about the effect of rationalization and simplification on income tax, whether taxpayer numbers had risen, if tax revenue had increased, and if litigation had decreased due to the changes. While Mahtab noted that income tax revenue had surged owing to the robust economy, he also highlighted specific complications, especially concerning pending appellate level cases and High Court verdicts, where the tax department secured 14% of the outcomes.
The committee deliberated on the effectiveness of technology-driven tax procedures and faceless decisions, acknowledging that taxpayers encountered certain challenges necessitating resolution. Mahtab emphasized the necessity for corrective actions to rectify these glitches. Additionally, the committee deliberated on corporate and non-corporate income tax levels in the nation, questioning why non-corporate income tax hadn't expanded despite a surge in taxpayer numbers.
He questioned the rationale behind this disparity and stressed the need for tax compliance from individuals who currently evade taxation. Mahtab concluded by stating that the committee submitted numerous inquiries, anticipating responses from the authorities within two to three weeks.
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