The finance ministry Monday said the task force to draft a new direct tax law to replace the existing Income Tax Act will submit its report by February 28.
The finance ministry Monday said the task force to draft a new direct tax law to replace the existing Income Tax Act will submit its report by February 28. The ministry had in November last year set up a 6 member task force tob rewrite the over 50 year old Income Tax laws. However, the convenor of the panel, Arbind Modi, retired on September 30, which left the report of the task force in limbo.
The ministry Monday named Central Board Of Direct Taxes (CBDT) member Akhilesh Ranjan as the head of the task force. “In partial modification of the earlier order, the Government has appointed Akhilesh Ranjan, Member (Legislation), CBDT as Convenor of the Task Force. Other members of the Task Force remain unchanged. “The Task Force shall submit its report to the Government by February 28, 2019,” the ministry said in a statement. The NDA government will be presenting its interim budget for 2018-19 before Parliament on February 1. The full 2018-19 Budget would be presented after the general elections due sometime mid of next year. Prime Minister Narendra Modi, during the annual conference of tax officers in September last year, had observed that the Income-tax Act, 1961 was drafted more than 50 years ago and it needs to be redrafted. Other members of the task force include Girish Ahuja (chartered accountant), Rajiv Memani (Chairman and Regional Managing Partner of EY), Mukesh Patel (Practicing Tax Advocate), Mansi Kedia (Consultant, ICRIER) and G C Srivastava (retired IRS and Advocate).
The task force was assigned to draft direct tax laws in line with the norms prevalent in other countries, incorporating international best practices, and keeping in mind the economic needs of the country. The panel was initially supposed to submit its report to the government, within 6 months, by May 22, 2018. On May 22, the finance ministry extended the term of the task force by another three months till August 22. The committee did not submit report within that deadline as well. Former finance minister P Chidambaram had in 2009 proposed the original direct tax code to replace the cumbersome IT law with a clean new law and to embody the principle of keeping taxes low and removing exemptions.
The NDA government, since coming to power in 2014, has already implemented general anti-avoidance rules GAAR. In 2016, Finance Minister Arun Jaitley also promised to lower corporate tax rate to 25 per cent in 5 years. Currently, income up to Rs 2.5 lakh per annum is exempt from tax for individuals.