Finance Minister Nirmala Sitharaman held a meeting on Tuesday to chart next year’s Union Budget. A review of the Income Tax Act and reclassification of the Customs Act were among the topics on the table.

Talking to Moneycontrol, a government source said, “Eyes on income tax, customs duty and capex reforms as Sitharaman begins Budget 2025 meetings.” By presenting the Union Budget 2025 in February, the finance ministry aims to simplify current tax laws and develop India’s fiscal system in line with the economic landscape.

With the Chief Commissioner of Income Tax VK Gupta as the lead of an internal committee responsible for reviewing the Income Tax Act, the ministry seeks to streamline the law.

The committee will umbrella 22 sub-committees that will ensure the suggested amendments comply with international standards, improve the system for the taxpayer and facilitate the government’s revenue mechanism.

The sub-committees have worked closely with domain experts and stakeholders to collect feedback and develop recommendations. Additionally, MoF has encouraged public participation, receiving more than 6,500 suggestions through an online portal launched on October 6, 2024.

A government official told MC, “Our goal is to make the Income Tax Act simpler and more comprehensible for taxpayers.”

Apart from this, the government also seeks to rationalise customs duties, an initiative introduced in the previous budget. Under this, tariff structures will be simplified and the issue of duty inversion will also be assessed.

The ministry’s plan to reform the income tax system aligns with Confederation of Indian Industry (CII) recommendations.

Last week, in a meeting with Revenue Secretary Sanjay Malhotra, CII urged the government to increase the capex by 25 per cent over 2024-25 (BE) with a sharp focus on infrastructure related to rural areas, agriculture, and the social sector.

“India has emerged as the beacon of stability and growth in a fraught world, in the last decade. We are looking at the Union Budget to further consolidate this position and create a competitive India, that is prosperous, inclusive, equitable, environment friendly and technologically advanced,” CII President Sanjiv Puri said.

With inputs from agencies

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Eyes on income tax, customs duty and capex reforms as Sitharaman begins Budget 2025 meetings