Business EconomyPosted at: Sep 7 2026 1:37PM


Go slow on scrutiny’ during I-T Act transition: BCIC President Ravi

Bengaluru, Sept 7 (UNI) The Income Tax Department should “go slow on scrutiny” during the initial transition to the new Income Tax Act, 2025, as taxpayers, businesses and professionals will need adequate time to understand and adapt to the new framework, Bangalore Chamber of Industry and Commerce (BCIC) President K Ravi said on Monday.
In an interaction with UNI on the sidelines of a conference on the new Income Tax Act and Rules here, Ravi said the government's objective of simplifying taxation could be undermined if taxpayers faced excessive scrutiny while still grappling with new provisions and their interpretation.
“Where there are these sorts of interpretations, the government should give people time to understand. Mistakes are bound to happen on either side,” he said.
Ravi identified transitional provisions as one of the biggest concerns under the new tax regime, particularly in determining whether the old Income Tax Act, 1961 or the new 2025 Act would apply to pending demands, appeals and other proceedings.
“In the name of simplification, we should not get into another area of complication where interpretation is required as to whether we should take the old Act or the new Act,” he said.
He said taxpayers and professionals would require considerable time to familiarise themselves with the new law, estimating that it could take a minimum of two to three years for chartered accountants, tax lawyers and businesses to fully understand and implement the new provisions.
“The law has to come down first to professionals like chartered accountants and tax lawyers. They are ultimately the people who have to implement it. My gut feeling is that even to understand the new rules and law, it will take a minimum of two to three years,” Ravi said.
He suggested that the government should also consider clearing pending appeals under the old regime so that the new Act can begin without the burden of accumulated disputes.
“Let the new Act start without our old baggage,” he said.
Ravi acknowledged the government's efforts to simplify the legislation, including reducing the number of sections and rules and removing repetitive provisions, but said industry feedback was essential to identify errors and omissions in the drafting.
“Drafting the law is one thing, but practical implementation can throw up a lot of challenges,” he said.
On whether the new framework would reduce disputes, Ravi said the intention was clearly to bring down litigation and make taxation more understandable.
“I am positive that it will improve. A lot of rules and sections have been reduced and repetitive definitions have been removed. This is a step in the right direction,” he said.
However, he stressed that implementation would determine the success of the reform.
“Formulating the Act and Rules is the first step. What is more important is implementing the law in its true spirit,” he said.
Ravi also called for greater trust between the Income Tax Department and taxpayers, saying businesses were willing to pay taxes but wanted certainty and simpler compliance.
“Business people are ready to pay tax. They want simplicity. They want to concentrate more on the business and less on compliances,” he said.
On MSMEs, Ravi said the new income-tax framework was unlikely to impose a significant additional burden, though smaller businesses continued to face compliance challenges under several other laws.
“As far as income tax is concerned, I don't find MSMEs being affected. There are various other laws which make compliance tough, but income tax itself is not something I see affecting MSMEs,” he said.
He also praised the role of technology in improving tax administration, citing faster refunds, the Annual Information Statement and faceless assessments.
“Technology has helped assessees to a great extent, whether it is filing tax returns, getting refunds or scrutiny,” he said.
Ravi said the ultimate objective should be ease of paying tax, alongside ease of doing business.
“I would say ease of paying tax is equally important. The trust factor is very, very important. The department also has to trust the assessees and the assessees should trust the department,” he said.
He added that scrutiny should be selective and focused on cases where there was evidence of tax evasion rather than becoming a routine burden for compliant taxpayers.
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