Thu. Mar 28th, 2024

According to the finance ministry, the task force asked to draft a new direct tax law to replace the existing Income Tax Act will submit its report by February 28.

A 6 member task force was appointed to rewrite the over 50 year old Income Tax law. But, as Arbind Modi, the convenor of the panel, retired on September 30, the work could not be continued. On Monday, the Finance Ministry appointed Akhilesh Ranjan,a member of Central Board Of Direct Taxes (CBDT) as the head of the task force. 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 new direct tax law will fall in line with the norms present in other countries. It will incorporate the best international practices while keeping in mind India’s economic needs. The panel was initially asked to submit the report to the government by May 22. But it could not. So, the term was extended by another three months till August 22. The committee did not submit report within that deadline as well.

In 2016, Finance Minister Arun Jaitley had promised to lower the corporate tax rate to 25 per cent in 5 years. At present,individuals with income up to Rs 2.5 lakh per annum are exempted from tax.

In 2009, the former finance minister P Chidambaram had proposed the original direct tax code to replace the cumbersome IT law .He suggested keeping the taxes low and removing the exemptions.

The NDA government is expected to present the interim budget for 2018-19 before Parliament on February 1. PM Modi, during the annual conference of tax officers in September last year, said that the Income-tax Act, 1961 was drafted more than 50 years ago and it needs to be redrafted.

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