New Income Tax Bill: Finance Minister Nirmala Sitharaman tabled the long-awaited bill for the new tax code in the Lok Sabha on Thursday, February 13.
While the new bill is a significantly shorter version of the Income Tax Act of 1961, it mandates that assessees would have to share their computer “ access codes” with tax officials during search and seizure operations, reported The Print.
What does the new Income Tax Bill say about search and seizure rules
One of the major criticisms of the existing Income Tax Act was the broad powers it granted to tax officials, allowing them to enter premises, conduct searches, and seize assets or information without providing a clear reason. However, the new Income tax Bill has provisions that require more cooperation with tax officials than was previously outlined in the Act.
According to the new Bill, an income tax official can enter any business or charity premises and demand that any proprietor, trustee, employee, or even “any other person” present at the time provide access to sensitive items or services, reported The Print.
Give officials the technical assistance
The existing Income Tax Act gives officers the powers to see books of account or other documents, check or verify the cash, stock “or other valuable article or thing which may be found therein”, and demand “any information as he may require as to any matter which may be useful for, or relevant to, any proceeding under this Act,” states The Print report.
The new Income Tax Bill expands the powers, stating that the person at the premises being inspected must also provide income tax officials the necessary technical assistance “including access codes” to enable the inspection of books of account or other documents, or computer system, or any other relevant material stored online.
‘Tax year’ introduced in new Income Tax Bill
The draft Bill eliminates the terms “assessment year” and “previous year,” replacing them with a new concept called the “tax year.”
The introduction of ‘Tax year’ means that timelines and computation in the Bill are “now with reference to the financial year for which the income is liable to be taxed.”