CBDT gears up for implementation of new Income –Tax Bill,

Ahead of the passage of the new Income Tax Bill, the Central Board of Direct Taxes (CBDT) has set in motion a detailed implementation programme. According to the action plan for FY26, the board aims to train at least half its workforce by March end. Following its introduction in the Budget Session, the Bill is being examined by a select committee of Parliament. It is expected to be taken up for consideration during the Monsoon Session, with the new Income Tax Act likely to be passed soon thereafter. The government has stated that the new Bill aims to simplify language, eliminate redundancy and streamline procedures and processes to enhance the taxpayer experience. According to officials, the success of the new statute will require a thorough analysis and internalisation of its objectives by all employees of the Income Tax Department. “While the Directorate of Training will prepare a comprehensive roadmap for training the workforce in understanding various aspects of the new IT Bill, the Pr CCsI T (Principal Commissioner of the Income Tax) of all regions will also need to play a pivotal role in this process,” an official said. Further, they will need to take a lead role in understanding and conveying the nuances and objectives of the new statute to taxpayers and tax administrators under their control, he added. Accordingly, once the Bill is passed, all Pr CCs IT will plan outreach activities to emphasise the basic tenets of the new Income Tax Act. The target is to organise at least five such activities every quarter, beginning with the quarter in which the Bill is passed. All Pr CCsIT will draw up a monthly training calendar, identifying the duration and various stakeholders to be covered through such training by June 30. Next, the official said, they will ensure training to at least 50 per cent of the personnel of their region by March 31, 2026.“The new Bill, once enacted, will replace the IT Act, 1961. The current Income Tax Act was enacted in 1961 and came into existence with effect from April 1, 1962. It has been amended nearly 65 times with more than 4,000 amendments,” he said, justifying the need for a new Bill. After the Bill was introduced in February, in detailed frequently asked questions, the Finance Ministry said that it proposes to eliminate redundant provisions. The drafting style is straightforward and clear. This minimises cross references and conflict by aggregating all applicable provisions related to a single scenario in one place. While the 1961 Act contains numerous crossreferences to sections, subsections, clauses, sub clauses, items and sub items, making the provisions challenging to interpret, the new Bill adopts a simplified reference system, allowing provisions to be cited by simply mentioning the Section. For instance, Section 133 (1) (b) (ii) in the new Bill would indicate sub clause (ii) of clause (b) of subsection (1) of Section 133 in the existing Act. A significant aspect of the Bill is the elimination of the concepts of ‘previous year’ and ‘assessment year’ and the use of just ‘tax year’. Prior to 1989, the concept of ‘previous year’ and ‘assessment year’ was introduced because taxpayers could have different 12month previous years for each source of income. From April 1, 1989, the previous year was aligned to a financial year in all cases.