Overview
- The Select Committee tabled its 285-recommendation report in the Lok Sabha on July 21, marking a key step in the overhaul of India’s six-decade-old direct tax framework.
- Recommendations include halving the tax code’s word count from over five lakh to about 2.6 lakh words, reducing sections from 819 to 536 and chapters from 47 to 23, and replacing ‘previous year’ and ‘assessment year’ with a single ‘tax year.’
- The panel advised removing Clause 263(1)(ix) to allow individuals to claim TDS refunds without penalties even if they file returns after the deadline.
- The committee urged restoring exemptions on anonymous donations to religious-cum-charitable trusts and recommended taxing non-profit organisations on net income rather than gross receipts.
- Stakeholder-driven changes also cover modernised definitions for capital assets and infrastructure companies, strengthened GAAR safeguards, and elimination of residual 1961 Act references before enactment in April 2026.