Little Has Changed in the Income-Tax Bill, 2025, Pg 8

• Objective of the Income-Tax Bill, 2025:

  • Aims to replace the Income-Tax Act, 1961, making tax laws simpler and more predictable.
  • Seeks to reduce litigation and increase transparency for both taxpayers and administrators.

• Concerns Over Complexity & Ambiguity:

  • Despite claims of simplification, the Bill retains convoluted legal language.
  • Many complex provisions remain unchanged, making tax laws difficult for the common taxpayer.
  • The change from “notwithstanding anything contained to the contrary” to “irrespective of anything to the contrary” is seen as cosmetic rather than substantive.

• Limited Structural Reforms:

  • The Bill does not alter taxation policies; it mostly rearranges and rephrases existing provisions.
  • Some redundant provisions have been removed, but major ambiguities and litigation risks persist.

• Increased Powers of Tax Authorities:

  • Expands search and seizure powers to digital spaces, including emails, cloud storage, and social media accounts.
  • Allows tax officials to override access codes, raising concerns about privacy and misuse.
  • The lack of judicial oversight makes digital intrusions legally permissible, raising constitutional concerns post Puttaswamy Judgment (2017).

• The Bill lacks substantive reforms and risks increasing state overreach in taxation matters.

• Instead of a full repeal, targeted amendments to remove draconian provisions could improve clarity.

• The parliamentary review should focus on privacy concerns and ensure safeguards in search and seizure laws.

Mains Mock Question:

"Critically analyze the Income-Tax Bill, 2025, with a focus on its impact on transparency, litigation, and digital privacy. Should India prioritize simplification over comprehensive reform?"