New Earnings Tax Invoice: What taxpayers need from Modi authorities’s newest Earnings Tax Act – KPMG survey reveals

New Earnings Tax Invoice: The federal government introduced in July 2024 its intention to conduct an intensive assessment of the Earnings-tax Act, 1961. The first goal is to rework the Earnings Tax Act 1961 right into a extra easy, clear and complete doc, aiming to minimise disputes and supply taxpayers with higher tax certainty.
KPMG in India did a survey in January 2025 to assemble trade views on this simplification initiative. The survey encompassed responses from over 200 executives throughout varied sectors, together with Industrial Manufacturing, Automotive, Monetary Providers, Shopper Markets, Infrastructure, Power and Pure Sources, Expertise, Life Sciences, Healthcare and Pharma, amongst others.
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The survey revealed vital findings throughout a number of areas:
1. Precedence Areas for Tax Simplification
84% of respondents prioritised dispute/litigation simplification.
64% advocated for simplifying TDS provisions, presently spanning 30+ transaction classes.
Different priorities included switch pricing (50%), capital positive aspects taxation (43%), and enterprise revenue calculation (38%).
2. Interpretation & Tax Legislation Certainty
96% endorsed making a government-published income-tax commentary, much like the OECD mannequin.
93% supported direct incorporation of helpful clarifications from tax circulars/notifications into the Act.
3. Dispute Decision & Litigation Discount
Present pending tax instances exceed 6 lakh, with 5.5 lakh at CIT(Appeals) stage.
69% supported introducing mediation/arbitration schemes.
62% favoured permitting tax authorities to enchantment DRP choices.
98% requested obligatory timelines for CIT(A) enchantment disposal.
4. Compliance Enhancement
61% most well-liked a hybrid mannequin for tax official interactions.
35% supported full faceless transition, whereas 4% most well-liked conventional interactions.
87% supported eliminating obligatory TDS certificates issuance.
64% advocated for Kind 26AS-based TDS credit score allocation.
5. Company Tax Construction
58% supported company tax fee discount.
34% had been happy with present charges, while 7% sought reductions for non-resident firms.
43% acknowledged advantages of the simplified tax regime.
6. Timeline Enhancements
82% requested prolonged deadlines for belated/revised returns.
94% urged revising switch pricing secure harbour guidelines.
7. Faceless Evaluation Challenges
41% reported no discount in aggressive assessments beneath faceless system.
60% urged eradicating CIT(A) appeals from faceless mode.
The Cupboard has given its approval to the New Earnings Tax Invoice on Friday, which can supersede the Earnings Tax Act 1961 that has served the nation for 60 years. Following its introduction in Parliament, the invoice might be forwarded to the Finance Standing Committee for thorough examination.
The preliminary section of the continued finances session will finish on February 13, earlier than reconvening on March 10 and operating by means of April 4.
Throughout the Funds 2025-26 presentation, Finance Minister Nirmala Sitharaman confirmed that the New Earnings Tax Invoice can be tabled within the current parliamentary session.