The Institute of Chartered Accountants of India, the apex body for chartered accountants, has given its recommendations to the Lok Sabha select committee, which is examining the income tax Bill, 2025. The ICAI’s recommendations include cutting down the number of sections and simplifying the language in the proposed legislation.
The ICAI council members have also suggested that the Bill be refined further in order to reduce the litigations.
For instance, ICAI has asked the committee to reduce the number of sections from 536 to about 436. “The current income tax act has 819 sections. There’s a scope to fine-tune the bill, and we believe that there are some interpretations which needs to be clarified,” said Charanjot Singh Nanda, president at ICAI.
The 31-member select committee, headed by Bharatiya Janata Party MP Baijayant Jay Panda, is examining proposed legislation. In the process, the committee is seeking recommendations from ICAI, EY, and industry bodies like CII and Ficci.
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Introduced last month by finance minister Nirmala Sitharaman, the new income tax Bill aims to simplify the complex income tax Act of 1961. Unlike other laws, the income tax Act is a dynamic legislation that requires frequent updates and amendments to reflect the shift in economic and social conditions.
Experts said the current income tax Act has become complex due to multiple reasons. “The legislation has been subject to frequent insertions to provide explanations and to take into account any court judgements. Plus, there are certain provisions, which have otherwise become non-functional, have been kept in the law to handle pending issues from the past years,” said a taxation lawyer.
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