The Parliamentary Standing Committee on Finance has undertaken a review of the initial implementation of the Income Tax Act, 2026, examining its impact on tax compliance, revenue mobilisation, taxpayer participation and pending litigation.
The committee, chaired by Bhartruhari Mahtab, held discussions with officials of the Department of Revenue, Ministry of Finance and Central Board of Direct Taxes (CBDT) as part of its review of direct-tax reforms focused on simplification, rationalisation and ease of compliance.
The Income Tax Act, 2026, came into effect from 1 April 2026. After approximately five months of implementation, the committee sought to assess whether the revised legislative framework has produced measurable changes in tax administration and taxpayer compliance.
During the meeting, the panel examined data relating to the growth in the taxpayer base, income-tax revenue collections and the status of tax-related litigation. Additional information has also been sought from the CBDT to enable a more detailed assessment of the implementation and practical impact of the new legislation.
According to Bhartruhari Mahtab, the committee received substantial information during the discussions. He indicated that income-tax collections have shown significant growth against the backdrop of a buoyant economy. The committee is expected to examine the available data to distinguish the impact of the legislative reforms from the effect of broader economic conditions.
The review forms part of the committee's assessment of whether the new Income Tax Act is delivering on its objectives of simplifying tax provisions, rationalising the direct-tax framework and improving ease of compliance.
The additional information requested from the CBDT will help the parliamentary panel evaluate the reforms across key parameters, including tax revenue, taxpayer numbers, compliance trends and pending litigation. CASansaar