The Task Force to rewrite the
decades-old Income Tax Act, 1961 has submitted its report to Finance
Minister Nirmala Sitharaman, sparking hopes of a simpler tax law with an
easier compliance burden and friendly tax administration.
convenor Akhilesh Ranjan, member of apex tax policy-making body Central
Board of Direct Taxes (CBDT), submitted the report after missing two
But the government has not made the report public with
official sources saying that it would first study it before putting it
in public domain for feedback.
It has been learnt that the report
contains two parts with one being the draft bill while the other
comprised recommendations considering best practices in the world.
terms of reference of the DTC panel was in June this year expanded to
include faceless and anonymised scrutiny assessments, reduction of
litigation and expeditious disposal of appeals, sharing of information
with GST and customs, simplification of compliance and system-based
cross-verification of financial transactions.
expectations, Sandeep Jhunjhunwala, Director, Nangia Advisors said that
implementation of few aspects as per the terms of reference of the DTC
panel were already activated by the government.
He said that
simplification of compliance by the proposed move would bring pre-filled
income tax returns, faceless and anonymised scrutiny assessment among
"On income tax litigation reforms, it is likely that
amnesty schemes akin to 'Sabka Vishwas' (Legacy Dispute Resolution)
Scheme that was introduced to curb pending litigations under the
erstwhile indirect tax enactments, could be announced on the direct tax
front as well. India Inc waits to see the bold reforms that would
manifest in the new foundation of direct taxes," Jhunjhunwala said.
experts hope the new draft law would ease compliance burden and reduce
future litigation by incorporating orders of various High Courts and the
Supreme Court while settling cases.
"The biggest thing one can
expect that the settled positions which have come through courts are
incorporated so that there are fewer litigations in the future," said
Riaz Thingna, director, Grant Thornton Advisory Pvt Ltd.
advisor associated with one of the Big-4 consultancies, however, said
that the new draft law would unlikely incorporate all the court orders.
"It will only include those where tax department has got favourable orders," he said.
report of the Task Force has come at a time when the economy is going
downhill with most macro indicators pointing to a slowdown. Various
sectors such as automobile and real estate are going through one of the
worst crisis in recent years with demand for relief package growing by
Rahul Garg, Senior Partner (Tax & Regulatory), PwC
India, said that his expectation is that the new DTC would be a modern
law which would make tax administration technology enabled. Further, it
would make tax governance effective.
Amrish Shah, Partner, Deloitte India hopes lower tax regime once the new direct tax code and recommendations are implemented.
corporate tax rate to 15 per cent -- if implemented, this will make
India possibly the most attractive investment destination in the world.
Corporate tax rate should also be uniform across companies irrespective
of their size," he said.