Income tax rules that govern how you pay taxes on your income date back to 1961. In order to keep up with time and to make rules on income tax less cluttered, the government has been contemplating a reform through the direct tax code (DTC). A task force that was entrusted with the preparation of the tax code has now submitted the report to the finance ministry although the recommendations are not out in the public domain yet.
The Income-tax Act over the decades has gone through many changes. But it wasn’t enough and new tax law was conceived keeping in mind the current conditions.
The intent of the DTC is to reform direct taxes for simplification that would in turn improve administration and compliance. The new DTC is expected to incorporate best tax system and practices internationally keeping in mind the economic needs of the country. It is expected to bring in faceless and anonymized verification, scrutiny and assessments, reduction of litigation and expeditious disposal of appeals.