Finance Minister Arun Jaitley on Friday gave two months extra time to CBDT (Central Board of Direct Taxes) task force to come up with a new draft direct tax code.
The government extended the deadline till 31 July at a meeting of secretaries in the ministry, said a person with direct knowledge of the matter.
The decision on the tax code is one of the final decisions of the incumbent government led by Prime Minister Narendra Modi.
President of India Ram Nath Kovind on Friday accepted the resignation of PM Modi and the council of ministers and requested them to continue till the next government assumed office.
The proposed new direct tax code will replace the Income Tax Act of 1961. The existing direct tax law deals with personal income tax, corporate tax and other levies. It has undergone numerous changes over the years.
The government wants to rewrite it in line with the economic needs of the country and to keep pace with evolving global best practices. One key consideration in the exercise is to improve tax compliance.
It will seek to bring more evaluation into the tax net and make the system more equitable for different classes of taxpayers.
On the other hand, the CBDT task force is India’s topmost policy framing body on the income tax.
Earlier this year, the Modi government had given a full tax rebate to those with income up to Rs 5 lakh during its interim budget.
Thus, Centre could announce more tax reliefs in the upcoming full Budget of the new government in July 2019.