The outcome was the massively condensed and considerably extra user-friendly Income Tax Act 2025.
“The announcement by the honourable Finance Minister was made on July 23, 2024 that inside six months the complete technique of simplification of the regulation, to make it extra lucid, clear, and exact might be achieved,” R.N. Parbat, the Central Board of Direct Taxes (CBDT) member accountable for laws, instructed The Hindu. “The job was given to the Department of Revenue and the CBDT. It was to be carried out in-house.”
By August 14, the drafting committee underneath Chief Commissioner of Income Tax V.Okay. Gupta was shaped, and that’s when the work started in earnest. Subcommittees have been shaped to take a look at each facet of the regulation with a view to take away redundant sections and evaluate the remaining.
As the scope of the work grew to become extra clear — the unique 1961 Act had 819 sections — the variety of subcommittees additionally grew. By the tip of it, there have been 26 completely different subcommittees, based on Mr. Parbat.
Apart from this, the method additionally integrated a evaluate committee that was tasked with reviewing the work carried out by the drafting subcommittees.
“Once the evaluate committee accomplished its work, it got here to the Tax Policy and Legislation [TPL] division of the CBDT,” Mr. Parbat defined. “And after that, when a draft was shaped, it was reviewed by one other set of senior officers of the CBDT.”
Throughout this, the Revenue Secretary and the Finance Minister took common briefings with the drafting committee and the TPL, whereas the Ministry of Law was additionally consulted.
“The work was broadbased, with greater than 150 officers of the Department engaged on it,” Mr. Parbat mentioned. “That included our Chairman, who was from the 1988 batch. At the identical time, the junior-most individual on the group was from the 2018 batch. Officers from throughout India have been chosen for this goal. We additionally concerned our probationers who have been present process coaching in Nagpur concerned within the course of.”
The draft of the Bill was laid earlier than Parliament on February 13, 2025, six months after the drafting committee was shaped. The variety of chapters has been slashed from 47 to 23 and the variety of sections from 819 to 536.
The new Bill included 57 tables as explanations, up from 18 and 46 formulae in comparison with the earlier six. The language was vastly simplified, jargon and archaic phrases equivalent to ‘however’ have been eliminated so far as potential, and examples have been offered the place wanted.
To put this in context, the Parliamentary Select Committee that was tasked with reviewing these modifications took 5 months to submit its report.
“They forwarded round 1,312 ideas to us, so once more our TPL division officers together with the core committee members of the drafting committee formulated the written replies and submitted them to the Select Committee,” Mr. Parbat mentioned.
After receiving the written and oral replies from the income secretary, the chairman of the CBDT, Mr. Parbat and his group, together with the core members of the drafting committee, the Standing Committee submitted its report back to Parliament on July 16, 2025.
The revised Bill was then handed in Parliament on August 12, 2025 — only one 12 months after the drafting committee was shaped. With the U.Okay. and Australia having accomplished comparable workouts in additional than 4 years, did the CBDT want extra time?
“The course of was began and accomplished throughout the time given to us, so there isn’t a query any longer of whether or not we’d have most popular extra time to do it,” Mr. Parbat mentioned. “It was a mammoth job that concerned 75,000 man-hours, so whether or not you set it in two years or six months, that’s the quantity of labor that was wanted.”
