Govt revives task force to redraft direct tax laws
27 Nov 2018
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The government has appointed a task force headed by Akhilesh Ranjan, member (legislation) of the Central Board of Direct Taxes (CBDT) to advise the centre on drafting a new direct tax code that suits the requirements of the Indian economy.
The new direct tax code, which will replace the Income Tax Act, 1961, is expected to make taxation more progressive, wherein the tax burden will be higher on those with better paying capacity.
The task force has been asked to submit its report by 28 February.
This is the second time the government has initiated moves to revamp direct tax laws after an earlier effort by a six-member task force got derailed.
The ministry had in November last year set up a 6 member task force to rewrite the over 50 year old Income Tax laws.
However, the convener of the panel, Arbind Modi, retired on 30 September, which left the task of report preparation unfinished.
The finance ministry on Monday named CBDT member Akhilesh Ranjan 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 task force was tasked with the job of redrafting 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 22 May 2018.
On 22 May, the finance ministry extended the term of the task force by another three months till 22 August. 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 I-T 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.
The report will be an important document for the Modi government to showcase before 2019 Lok Sabha elections, articulating the tax policy direction it would pursue if the National Democratic Alliance (NDA) returns to power.
