Centre sets up panel to review Income Tax Act

Centre sets up panel to review Income Tax Act

After an overhaul of indirect tax regime, the Centre on Wednesday decided to review the 56-year-old Income Tax Law to bring it in sync with the economic needs of the country.

The government has set up a seven-member task force headed by Arbind Modi to review the Income Tax Act, 1961 and draft a new Direct Tax Law.

Addressing the Rajaswa Gyan Sangam in September, Prime Minister Narendra Modi had asked revenue officials to re-draft the Income Tax Act.

With Arbind Modi, member (legislation) with the Central Board for Direct Taxes as Convenor, the task force comprises Girish Ahuja (chartered accountant), Rajiv Memani (Chairman and Regional Managing Partner of EY), Mukesh Patel (tax advocate), G C Shrivastava (former IRS and advocate) and Mansi Kedia (Consultant, ICRIER). Chief Economic Adviser Arvind Subramanian will be a permanent special invitee in the task force.

The Terms of Reference of the task force include drafting a new law keeping in mind the prevalent taxation system in other countries, international best practices and economic needs of the country.

The statement said the task force will be allowed to set its own procedures for regulating its work and shall submit its report to the government within six months.

Incidentally, Arbind Modi, a 1981 batch Indian Revenue Service officer, had been tasked with drafting a new Direct Tax Code in 2009. The first draft DTC Bill was released for public comments in August 2009. It was introduced in Parliament exactly a year later and referred to a standing committee.

After incorporating the suggestions made by the standing committee, a revised DTC was released in March 2014 and the government's latest move is expected to take it forward.

In July, the government overhauled the indirect taxes regime by introducing the Goods and Services Tax.

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