Government rolls out simplified income tax, GST reforms to benefit small taxpayers

The Ministry of Finance has launched several initiatives to simplify income tax and GST filing processes for small taxpayers. Minister of State for Finance, Pankaj Chaudhary, while responding to a Lok Sabha query, highlighted the government’s continuous efforts to streamline tax processes.

In a bid to streamline tax compliance processes, the Ministry of Finance has launched several initiatives aimed at simplifying both income tax and Goods and Services Tax (GST) procedures, specifically targeting small taxpayers. These measures are intended to ease tax filing, reduce operational complexities, and encourage voluntary compliance among small businesses and retail investors. On 11 August 2025, Minister of State for Finance, Pankaj Chaudhary, addressed these efforts in the Lok Sabha, reflecting the government's commitment to creating a more taxpayer-friendly environment.

One of the notable initiatives introduced by the Income Tax Department is the provision of multiple modes for filing Income Tax Returns (ITR). Taxpayers now have the flexibility to file their returns online, offline, or via Excel utilities, accommodating diverse preferences and technical capabilities. To further facilitate the process, pre-filled data in ITR forms now encompasses income details, tax payments, and other relevant information from documents such as Form 26AS and the Annual Information Statement (AIS).

The GST portal has been enhanced with an auto-generated return feature, which compiles details of outward supplies based on data provided by taxpayers and their suppliers. This return can be edited before submission, simplifying the filing process. Moreover, a new option enables taxpayers to amend details of outward supplies for the current tax period, offering greater flexibility. The threshold limit for the composition scheme under GST has widened from ₹75 lakhs to ₹1.5 crore, excluding certain special category states, allowing more small businesses to benefit from simplified compliance.

 

In a move to promote cashless transactions, payment methods have been expanded to include digital options such as UPI and IMPS, thereby enhancing convenience for GST payments. Additionally, the government has conditionally waived mandatory registration for intra-state supply of goods through e-commerce operators (ECOs), easing the compliance burden for small businesses engaged in e-commerce since October 2023.

The Ministry of Finance is also focusing on fast-tracking application approvals to improve taxpayer services. Applications authenticated via Aadhaar receive approval within seven working days, while those lacking such authentication are processed within 30 days. This initiative aims to reduce delays and increase efficiency in service delivery.

Support services have been expanded significantly with the establishment of 457 Aaykar Seva Kendras (ASKs) across India. These centres provide assistance for income tax and GST-related queries and grievances, making it easier for taxpayers to obtain necessary support. The government has also launched taxpayers’ hubs in Tier II and Tier III cities to boost tax literacy and encourage voluntary compliance among small traders and rural entrepreneurs.

Understanding the challenges faced by many taxpayers, the Income Tax Department has made instructional videos available on its official e-filing portal’s YouTube channel. These step-by-step tutorials guide users through filing their returns and addressing common queries, making tax compliance more accessible. Informative brochures are published annually to keep taxpayers informed about rules and procedures.

Through these comprehensive efforts, the Ministry of Finance aims to foster an environment that encourages greater participation among small taxpayers in India's economy. By simplifying procedures, reducing compliance burdens, and expanding support, the government seeks to create a more inclusive and efficient tax system.

Source::Business Today ,  dated 12/08/2025.