New Delhi: Lok Sabha panel, which is reviewed by the Income Tax Act, 2025 is set up to design access to provisions against avoiding taxpayers aimed at limiting aggressive tax planning.
The government is likely to accept most of the 285 recommendations and plans for the introduction of revised legislation at the monsoon meeting of parliament since Monday, by three people who are aware of the functioning of the panel and thinking in the government.
The proposal of income tax 2025, which was approved by parliament and agreed with the President, will become law and replace the 1961 income Act.
The Committee led by the ruling member of Lok Sabha Bharatiya Janata Baijayant Panda is ready to recommend that the Indian general rules against the avoidance (Gaar) forbid transactions that are designed to avoid tax should be assessed with regard to the specific context of each case.
This would require renewal of certain forms in the provisions of the 1961 income Act, as they exist today, but were abandoned as part of the effort to simplify the text in the bill, one of whom spoke all of whom spoke under anonymity.
The selected committee is ad hoc or a temporary parliament panel created with a specific purpose of examining a specific bill. Dissolve after the task.
The aim is to balance strongly enforce the provisions on counterattack with the protection of taxpayers. The current section 98 of the 1961 Income Tax Act stipulates that, if it is found that the transaction is designed to avoid tax liability, the consequences, including the rejection of the tax benefit, will be decided in a suitable way “under the case of the case”.
The Committee is to recommend the restoration of these words referring to a specific circumstance of the case in the final form of the bill, which the government introduces in parliament, because these words act as a guarantee to ensure that Gaar is reasonable and procedurally fair, the person added.
The selection Committee approved the revised provisions in the bill with the amendment that these words should be explicitly renewed. This is expected to ensure the balance between deterrence against avoiding tax liability and protection of taxpayers, the person said.
Experts have pointed out that this sentence ensures that the assessment or conclusion closed in the case of one company transaction is not blindly applied to another transaction of the same company or to a similar transaction by another company without dealing with the specific circumstances of these transactions.
“The Phrase ‘in the Circumstance of the Case’ is Crucial Because It Ensures That Tax Authorities Take the Incount of the specific Facts of Each ARANGement Before Applying Harsh Consequences and Declaling Any The phrase from Draft Income Tax Bill 2025 Was to Simplify the Language of Provision, But the absence of this phrase would have allowed tax officers to Deny Tax Benefits in and Broad and Mechanical Manner – Cene in Genuine Commercial Transaction, ”said Amit Maleshwari, tax partner Advisory company.
Experts believe that the abolition of the sentence could lead to uncertainty and the lawsuit and the recommendation of its renewal, the selection committee correctly moved correctly to protect taxpayers from universal treatments and adherence to justice in the tax system.
The Committee is scheduled to submit its Lok Sabha report on Monday. The Ministry of Finance is preparing to revise the bill on the basis of a report of the Committee with a high degree of urgency to approve the bill at the current meeting from 1 April 2026.
The proposed changes to the Income Tax Act, 2025, are mainly engaged in the preparation of anomalies compared to the language of existing law and include updates by the Act on Finance 2025, said Sameer Gupta, India leader and quoted media reports.
“If there are any significant changes, it will be necessary to assess it after the report (selection committee) and the amended bill will be submitted before parliament,” Gupta added.
According to Gupta, proposals for more substantial reforms include further simplification and rationalization of the rules of residence, TDS/TCS provisions, the deductibility of certain expenditures that are currently susceptible to litigation, etc.
“If they are not solved in the amended law, it will have to be accepted within the subsequent budget exercise,” Gupta said.
(Tagstotranslate) income tax proposal
