The task-force rewriting the income tax laws has been granted three months more time till August to submit its report to the government, the finance ministry said today.
The task-force rewriting the income tax laws has been granted three months more time till August to submit its report to the government, the finance ministry said today. The finance ministry had in November last year set up the task force to draft direct tax laws in line with laws prevalent in other countries, incorporating international best practices, and keeping in mind the economic needs of the country. The panel, under CBDT Member Arbind Modi, set up to draft a new law to replace the existing Income Tax Act, which has been in force since 1961, was to submit its report by this month-end.
“The Government has extended the term of said Task Force by a period of three months,” the Central Board of Direct Taxes (CBDT) said in a statement. In March this year, the task force had sought stakeholders’ feedback on their experience of filing income returns on the I-T portal as well as scrutiny procedure and levy of penalty. It sought their comments on five major points– filing of return of income, tax credit, processing/scrutiny of return, litigation and recovery of disputed tax demand, penalty and prosecution.
Prime Minister Narendra Modi, during the annual conference of tax officers in September, had observed that the Income Tax Act, 1961 was drafted more than 50 years ago and it needs to be redrafted. Former finance minister P Chidambaram had in 2009 proposed the original direct taxes code to replace the cumbersome IT law with a clean new law and to embody the principle of keeping taxes low and removing exemptions. Arbind Modi had assisted the former finance minister in preparing the code.
However, the DTC bill, that underwent many changes, was not passed by Parliament. The Direct Taxes Code (DTC) Bill, 2010, which was introduced in Parliament in 2010, lapsed with the dissolution of the 15th Lok Sabha. The Bill had proposed annual I-T exemption limit at Rs 2 lakh, and levying 10 per cent tax on income between Rs 2 lakh and Rs 5 lakh, 20 per cent on Rs 5-10 lakh and 30 per cent above Rs 10 lakh. For domestic companies, it suggested tax rate of 30 per cent of business income. Currently, income up to Rs 2.5 lakh per annum is exempt from tax for individuals.