Panel To Redraft Direct Tax Laws To Focus On Simplification
The recommendations of the panel is likely to be included in the final budget for 2019-20
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The panel set up to redraft the 50-year old Income Tax law will focus on simplification of language, and tackling those areas that have become "problematic" due to addition of multiple explanations and provisos overtime, a senior government official said on Wednesday.
Central Board of Direct Taxes (CBDT) member and head of the panel tasked with redrafting of Income Tax laws Akhilesh Ranjan asserted that the entire exercise would be aimed at encouraging compliance and ensuring tax certainty.
"Tax laws must be capable of being understood... In some areas language has become rather problematic. There have been additions and insertions of explanations after explanations, provisos after provisos...
"So while we take that message of not dramatically trying to just change language for the sake of change, I think we should go into area where we can make law simpler to understand. That would encourage compliance and provide tax certainty," Ranjan said at an event here.
He said the panel is cognisant of the industry not being in favour of tinkering much with the language of the legislation which has now been "well understood by taxpayers and professionals".
The task force to redraft the 50 year old Income Tax laws would submit its report by February 28, 2019.
The recommendations of the panel is likely to be included in the final budget for 2019-20 which will be presented after the general elections due next year.
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 assigned to draft 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.
Prime Minister Narendra Modi, during the annual conference of tax officers in September last year, had observed that the Income-tax Act, 1961 was drafted more than 50 years ago and it needs to be redrafted.