New Panel Set Up To Review And Redraft Draft Income Tax Law in India

0
New Panel Set Up To Review And Redraft Draft Income Tax Law
New Panel Set Up To Review And Redraft Draft Income Tax Law

The Central Government has set up a task force to redraft the five-decades-old income tax law and make it more in line with the current economic demands of the country

The task force is led by Arbind Modi, CBDT Member (Legislation) who has been appointed as the Convener. Other members include Rajiv Memani (Chairman and Regional Managing Partner of EY) Girish Ahuja (chartered accountant), and Mansi Kedia (Consultant, ICRIER).

Income Tax Act Drafted 50 Years Ago

Prime Minister Narendra Modi had commented in September during the annual conference for tax officers that the Income-tax Act, 1961 had been drafted over 50 years ago and needed to be redrafted.

A ministry statement issued this week said that the task force has been constituted to review the Act and develop a new direct tax law that is more in tune with the “economic needs of the country.”

The task force is expected to submit its report within 6 months to the government.

 

Chief Economic Adviser Arvind Subramanian is slated to join the task force as a permanent special invitee.

New Direct Law Drafted In Line With Global Best Practices

The panel has been asked to draft new direct tax provisions keeping in mind the tax systems that are in force in other countries, global best practices as well as the economic requirements of the country.

The UPA government had released the Direct Taxes Code in 2009 as a measure to replace the IT Act with a simpler tax framework.

However Direct Taxes Code (DTC) Bill, 2010, lapsed after the 15th Lok Sabha was dissolved.

Under that bill, the annual IT exemption was placed at Rs 2 lakh with 10 percent tax levied on income between Rs 2 lakh and Rs 5 lakh, 20 per cent for income ranging Rs 5 lakh to 10 lakh and finally 30 per cent for income above Rs 10 lakh.

In case of Domestic companies the tax rate suggested was 30 per cent of total business income.

Since coming to power in 2014, the NDA government has implemented the general anti-avoidance rules GAAR. Finance Minister Arun Jaitley announced in 2016 that corporate tax rate would to be reduced to 25 per cent in 5 years.

Right now, individual income up to Rs 2.5 lakh per annum is fully exempt from tax.

LEAVE A REPLY

Please enter your comment!
Please enter your name here