Context
Recently, the Parliamentary Standing Committee on Finance reviewed the implementation of the Income Tax Act, 2026, raising concerns over compliance difficulties, wide discretionary powers of tax authorities and a perceived “punitive” approach to enforcement.
Explanation
- Income tax is a direct tax imposed by the Union on the income of individuals and other entities; agricultural income is excluded from Union income taxation.
- Under the Constitution, Entry 82 of the Union List covers taxes on income other than agricultural income.
- The Income Tax Act, 2026 replaced the Income-tax Act, 1961, with the objective of simplifying and rationalising direct-tax law.
- The Central Board of Direct Taxes (CBDT), under the Department of Revenue, Ministry of Finance, administers direct taxes.
- Direct taxes are generally borne by the person on whom they are imposed, unlike indirect taxes whose burden can be shifted.
- The Parliamentary Standing Committee on Finance scrutinises matters relating to ministries including Finance, Corporate Affairs and Statistics & Programme Implementation.
- The Committee has sought data on tax collections, number of assessees and pending litigation to evaluate the new law’s impact.
La Excellence IAS Academy, the best IAS coaching in Hyderabad, known for delivering quality content and conceptual clarity for UPSC 2026 preparation.
FOLLOW US ON:
◉ YouTube : https://www.youtube.com/@CivilsPrepTeam
◉ Facebook: https://www.facebook.com/LaExcellenceIAS
◉ Instagram: https://www.instagram.com/laexcellenceiasacademy/
GET IN TOUCH:
Contact us at info@laex.in, https://laex.in/contact-us/
or Call us @ +91 9052 29 2929, +91 9052 99 2929, +91 9154 24 2140
OUR BRANCHES:
Head Office: H No: 1-10-225A, Beside AEVA Fertility Center, Ashok Nagar Extension, VV Giri Nagar, Ashok Nagar, Hyderabad, 500020
Madhapur: Flat no: 301, survey no 58-60, Guttala begumpet Madhapur metro pillar: 1524, Rangareddy Hyderabad, Telangana 500081
Bangalore: Plot No: 99, 2nd floor, 80 Feet Road, Beside Poorvika Mobiles, Chandra Layout, Attiguppe, Near Vijaya Nagara, Bengaluru, 560040