BackDid you know? A new Direct Tax Law is in the making
On 21 March 2018, the CBDT asked stakeholders and general public to give suggestions and feedback to review the decades-old Income Tax Act, 1961
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On 21 March 2018, the Central Board of Direct Taxes (CBDT) asked stakeholders and general public to give suggestions and feedback to review the decades old Income Tax Act, 1961. You can download the relevant form from www.incometaxindia.gov.in, fill it, scan and then mail back to the tax department.
But why revise the existing tax laws?
Keeping up
The Income Tax Act is more than 55 years old. Over this time, it has gone through many changes. But it is felt that changes by themselves may not be sufficient, and an altogether new tax law is needed, keeping in mind the current conditions.
At present, under the supervision of Arvind Subramanian, chief economic adviser, the main task is to consider the direct tax system prevalent in various countries, look at the best practices internationally, and draft a new Direct Tax Law (DTL) keeping in mind the economic needs of the country and any other connected matter. The feedback form on the tax department’s website gives an idea of what all is being considered. The questionnaire is broadly asking for feedback on issues such as filing of tax return, tax credit, processing and scrutiny of return, litigation and recovery of disputed tax demand, penalty and prosecution, and other issues.
Backdrop
In September 2017, Prime Minister Narendra Modi had stated that there was a need to re-draft the direct tax Act. The government constituted a task force and asked it to submit a report in 6 months.
But this is not the first time that a government has felt the need to revise income tax laws. In Budget for 2005-06, the United Progressive Alliance (UPA) government had announced its intention to introduce a revised and simplified Income-tax Bill. A Direct Taxes Code (DTC) was drafted. In July 2009, the then finance minister, Pranab Mukherjee, proposed the DTC along with a discussion paper, to the public for debate, while presenting the Budget for 2009-10.
Based on the inputs, the government finalised the DTC Bill, which was introduced in Parliament in August 2010. A ‘revised’ version of DTC was released in March 2014. But after the government changed in May 2014, there was no talk of the DTC Bill for next 3 years, till September last year.
Your contribution
You can give your feedback in the format drafted by CBDT, which can be downloaded from the income tax website. After putting in your comments, you can mail the form to: rewriting-itact@gov.in. The last date to submit your comments and feedback is 2 April 2018.
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