Budget 2025: CBDT president refuses to talk about the silent burial of the old tax system, 97 % is expected to turn into a new system

Ravi Aguardus, head of the Central Council for Direct Taxes (CBDT), refused to speculate that the Federation’s 2025 budget indicates the end of the old tax system. “As in history, both tax systems, and the option is with the taxpayer – whatever the person who feels is useful.”

In interaction with Siddhath ZARABI, Editor Work todayAguardus has acknowledged that the new tax system provides more benefits, driven to simplify the system. “In the old tax system, there are some discounts and exemptions open to interpretations, which makes the calculations complicated. To address this, the new tax system provides an income tax account directly with reduced prices,” he said.

He pointed out that this simplicity resonated with taxpayers, as it has already adopted about 74 % of the new system. “I am sure that with this change that appeared in the amendment to the financing bill, more people will be asked to make a call in this matter,” he added.

When asked about the expected adoption rate after the budget 2025, Agarwal expected a significant increase. “There are about 8.5 rupees for individual taxpayers, and from this, 75 % has already chosen the new tax system. Moving forward, this number should touch somewhere about 95-97 %,” it predicted.

In discussing the philosophy behind the new income tax bill, Agarawal recalled the previous statements of the Federation, Nermalla Sitraman, on the simplification of the income tax law of 1961. “Since then, we have worked on this for a period A law, which will be submitted to Parliament. ” The focus was on clarity and ease of understanding. “The language is simple, the litigation range decreases, which enhances the ease of doing business and better compliance,” Agarawal noted.

The Minister of Finance highlighted that the new draft law has reduced the law by about 50 %, eliminating the repetition and rulings that are outdated and repeated. “We found some gaps and connected them. This is related to confidence in the honest taxpayers first and later scrutiny,” Agarawal noted.

Treating concerns about aggressive scrutiny through the evaluation of officers, Agarwal emphasized the government’s confident approach. “We have about 8.75 crushers of taxpayers, and in 99.5 % of cases, we accept returns as taxpayers announced. This is confidence,” he said. For the remaining cases, he explained that the audit is not arbitrary but based on data analyzes and red flags.

Agarwal also detailed changes to the concept of updated returns. “Initially, taxpayers had two years to update the returns. Now, this spanned to the third and fourth years,” he explained. He said the idea is to reduce unnecessary interrogation. “If we receive information after a year, then we offer it in the annual information statement.