India, Feb. 1 -- The Union Budget presented in the Parliament on Sunday proposed a series of direct tax reforms aimed at rationalising penalties and prosecution provisions under the Income Tax Act.

Finance Minister Nirmala Sitharaman announced that assessment and penalty proceedings will be integrated through a common order to avoid multiplicity of proceedings and reduce litigation.

Under the new framework, taxpayers will not face any interest liability on the penalty amount during the pendency of an appeal before the first appellate authority, irrespective of the outcome. The quantum of mandatory pre-payment has also been reduced from 20% to 10%, and will continue to be calculated only on the core tax demand.

As an additional measure ...