The ongoing overhaul of direct tax may provide the government with an avenue outside of the Budget to outline intended relief for taxpayers, including small businesses.
While street tries to guess if Finance Minister Arun Jaitley has enough room to announce a big income tax relief in the upcoming Budget 2019, the Narendra Modi-government may have yet another chink in its armour to give some hope to the voters ahead of Lok Sabha election 2019.
The ongoing overhaul of direct tax may provide the government with an avenue outside of the Budget to outline intended relief for taxpayers, including small businesses, Financial Express Online has learnt.
The task force to draft new direct tax code is looking at all aspects anew after its reconstitution, drawing only a little from a previous submission made by the panel, a senior official involved in the process told Financial Express Online. “We were told to look at it all afresh,” the official said.
The task force is due to submit its report on 28 February 2019. The task force is now headed by CBDT member Akhilesh Ranjan, who was appointed its convenor in November 2018 to replace Arbind Modi, who retired in September 2018. Reportedly, the previous panel had made a submission, but it was not declared as a ‘report’, and was not made public.
Responding to a question if the upcoming election and the implementation of the model code of conduct will prevent the government from acting on the task force report, the official said: “It doesn’t prevent us from bringing it into public discussion.” Further, certain aspects of the report could be continued to be worked upon, the official added.
There is a possibility of some direct tax relief for small businesses, the official said in response to another question, adding: ‘It’s an election year.”
The government formed the task force in November 2017 to draft a new direct tax law to meet the present economic needs of the country, continuing an attempt made by the then Finance Minister P Chidambaram in 2009 by bringing in a Direct Taxes Code (DTC).
Then, task force member Mukesh Patel had told Financial Express Online that Modi government was looking to simplify the entire process of tax-payment, minimise exemptions that were open to interpretation, and, most importantly, reduce personal contact between the taxpayer and the tax officials to reduce harassment.
The task force is redrafting Income Tax Law keeping in mind three things: direct tax system prevalent in other countries, the best international practices in direct tax, and the economic needs of the country.
The task force members are: Akhilesh Ranjan, Member (Legislation), CBDT (Convenor); Girish Ahuja, chartered accountant; Rajiv Memani, Chairman, EY; Mukesh Patel, tax advocate; Mansi Kedia, Consultant, ICRIER; G C Srivastava, retired IRS.