It’s Not Just In Tax That India’s Laws Are Taxing

medium118562536Laws are meant to be dense and jargon-infested. Until now. In a bold move, GOI has introduced a simply written new Income Tax Bill in Parliament. The present Income Tax Act, 1961 is the symbol of legal gobbledygook. It has 819 sections. Some of these sections have over 50 sub-sections each. Most of these have clauses, sub-clauses and provisos. Some have further provisos to provisos. All this comes together to a total of 512,535 words. For reference, Valmiki’s Ramayan in English is around 480,000 words long and has a story. It’s not surprising that most Indians have read parts of Ramayan but so few Indians pay income tax.Key changes in new I-T Bill | First, it has reduced the length of sentences. The original Act was a reader’s nightmare with the engine, bogeys and guard compartment of each sentence so far apart they pulled in their own directions. The train has been brought back on track.Second, taxpayers are always perplexed by the difference between “financial year” and “assessment year”. Both have to be used differently, yet mean the same thing. Confused? Join the club of any honest tax-paying Indian who isn’t a chartered accountant. The bill does away with this difference. It introduces the simple concept of a “tax year”. It is likely to reduce a lot of avoidable litigation and unnecessary heartburn.Reactions to the bill have included writing the changes off as ‘old wine in new bottle’. This is missing the wood for the trees. The new bill’s purpose isn’t to write a new tax code. Indian tax law remains heavily skewed. The taxpayer is treated with mistrust at best, and contempt at worst. Provisions that seek to entrap rather than enable remain rife. All this must change over time.But that’ll only happen when govt trusts citizens and vice versa. Such a relationship of trust will not ensue when govts continue to speak legalese. Legalese confuses citizens, provides discretion to authorities and altogether spooks the honest taxpayer. By simplifying the law’s language, govt has taken a bold first step.People want simplicity | If a legal minefield like the income tax act can be simplified, so can other statutes that aren’t as complex. India’s first public survey on how legalese affects citizens and business, Saral Survey Report, a Vidhi initiative, shows how widespread this demand for simplification is — 98% of those surveyed said laws should be simple so they don’t face consequences or financial loss. Over 90% of lawyers surveyed agreed professional legal help shouldn’t be needed for routine transactions. A plain language version of each of India’s 882 statutes would genuinely empower citizens.Question is how can govt build on this. Here are four ideas:* A score for ministries: Ministries should be incentivised to compete with one another. All laws should be assessed on four metrics — simplicity (how easy to read), accessibility (how easy to understand), rationality (how sensible) and actionability (how clearly defined are roles, rights and responsibilities). A nodal body like Niti Aayog can, with expert inputs from the law ministry, be given the task. Ministries piloting the simplest and clearest laws can be ranked and rewarded.* A basic template: The new Income Tax Bill takes giant strides towards simplification but doesn’t go far enough. Sentences remain long, too many qualifiers exist, and remnants of convoluted legalese remain. The bill begins with “This Act may be called the Income Tax Act, 2025.” But why may it be called that? Why does it not simply say “This act is the Income Tax Act, 2025”?* Simplify processes too: It’s harder to simplify processes. The simple Income Tax Bill still has taxpayers and authorities locking horns at five levels of adjudication. On top, govt appeals are filed on a seemingly routine basis. In 2023-24, about 74% of the total tax demand was under litigation.Voluntary, fast-track mediation could be introduced, with a panel of independent mediators helping taxpayers and income tax authorities reach resolutions.* Go vernacular: After having produced a simple Income Tax Bill in English, GOI must also make sure simplification finds its way to Indian languages. However, formal legal Hindi, Bengali or Tamil are known to be notoriously more complex than their English counterpart.For simplification to benefit every Indian, GOI should rely on AI-driven tech (like Bhashini — India’s AI-driven language translation platform) to produce simple versions of laws in all 22 languages in the 8th Schedule of the Constitution. This’ll take time. The journey of simplifying India’s laws has only just begun.The writers are with Vidhi Centre for Legal Policy. Views are personal