How did the Income Tax Department full the “mammoth” process of rationalising and simplifying the big Income Tax Act 1961 in nearly six months, after which implementing the Select Committee’s voluminous strategies in only one month? By cramming in 75,000 man-hours of labor in that point and even placing probationers on the job, that’s how.
The end result 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 within six months the entire process of simplification of the law, to make it more lucid, clear, and precise will be achieved,” R.N. Parbat, the Central Board of Direct Taxes (CBDT) member in cost of laws, informed The Hindu. “The task was given to the Department of Revenue and the CBDT. It was to be done 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 side of the regulation with a view to take away redundant sections and evaluation the relaxation.
As the scope of the work turned extra clear — the unique 1961 Act had 819 sections — the variety of subcommittees additionally grew. By the finish of it, there have been 26 totally different subcommittees, in accordance with Mr. Parbat.
Apart from this, the course of additionally included a evaluation committee that was tasked with reviewing the work performed by the drafting subcommittees.
“Once the review committee completed its work, it came to the Tax Policy and Legislation [TPL] division of the CBDT,” Mr. Parbat defined. “And after that, when a draft was formed, it was reviewed by another 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 more than 150 officers of the Department working on it,” Mr. Parbat stated. “That included our Chairman, who was from the 1988 batch. At the same time, the junior-most person on the team was from the 2018 batch. Officers from all over India were selected for this purpose. We also involved our probationers who were undergoing training in Nagpur involved in the process.”
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 tremendously simplified, jargon and archaic phrases corresponding to ‘notwithstanding’ have been eliminated so far as attainable, and examples have been supplied 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 around 1,312 suggestions to us, so again our TPL division officers along with the core committee members of the drafting committee formulated the written replies and submitted them to the Select Committee,” Mr. Parbat stated.
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 yr after the drafting committee was shaped. With the U.Okay. and Australia having accomplished comparable workouts in greater than 4 years, did the CBDT want extra time?
“The process was started and completed within the time given to us, so there is no question any longer of whether we would have preferred more time to do it,” Mr. Parbat stated. “It was a mammoth task that involved 75,000 man-hours, so whether you put it in two years or six months, that is the amount of work that was needed.”