Business News Desk – Like the last few years, this time too in the Union Budget 2025, the government’s focus may be on simplifying the income tax rules. The government wants to gradually make changes in the Income Tax Act. The government has already made major changes in the rules of capital gains tax and withholding tax. The government has also introduced a new income tax system without deductions. In the Union Budget to be presented on February 1, taxpayers can expect such changes in income tax rules, which may reduce their interest in the old system.
Finance Minister Nirmala Sitharaman may change the tax slabs/rates in the new tax system. She can keep the old system intact. You can also decide to end it. The existing rule of imposing tax on third property on the basis of notional rent can be done away with, as wealth tax is already in force. Apart from this, there is no standard for determining the notional rent and it is a quite complex process. Therefore, the government can eliminate this burden of additional tax on the taxpayer.
Due to complexity in tax rules, taxpayers waste both time and money. They have to do many types of paperwork. They have to understand complex tax provisions. In some cases, the services of a tax consultant also have to be taken. At present there is a lot of workload on the Income Tax officers. They have to verify the claims and tax filings of the taxpayers. They have to keep track of assessments, demands, refunds etc. This process of compliance proves to be very costly as the tax collection is less in comparison.
The government can also simplify tax rules for NRIs. At present, if the landlord is an NRI then the tenant has to take TAN. A separate form has to be filled. Have to create a separate login. If the landlord is not an NRI, the tenant can file the withholding tax return directly from his e-filing account and pay the tax online. Similarly, the government may waive the requirement of 30 days of ITR-V verification for non-residents who do not have an Aadhaar in India and those living abroad.
This is also important because summer holidays take place in many countries in August. The use of Artificial Intelligence (AI) and other technologies can be increased to simplify income tax rules. Ever since the government has increased the use of technology in income tax processes, it has become much easier. AIS, TIS have helped a lot in this. The government may announce in the Union Budget to increase the use of technology in income tax processes.