On August 19,2019 a group of experts panel headed by Central Board of Direct Taxes (CBDT) legislative member Akhilesh Ranjan who was appointed as the convener of the task force in November 2018 by the finance ministry,submitted a report to Nirmala Sitharaman(Finance Minister), to replace the Income Tax Act with a new Direct Tax Code(DTC).
Key points
- The idea to replace the Income Tax (IT) Act,1961 was given by the Prime Minister Narendra Modi, at the annual conference of tax officers in New Delhi in September 2017, as the Income-Tax Act, 1961, had been drafted more than 50 years ago and needed a change.
- The report which was scheduled to be submitted by May 31 2019, was given additional time till August 16 by the then finance minister Shri Arun Jaitley.
- The task force was assigned to draft direct tax laws incorporating international best practices and also considering the economic needs of the country.
- Akhilesh Ranjan-led panel was tasked to submit the report by February 28, 2019, following Arbind Modi’s (the then CBDT convener) retirement on September 30, 2018.
- The report is expected to be placed for stakeholder consultations and is likely to be placed in Parliament as a part of Union Budget 2020-21.
Task force members: The task members other than Ranjan includes
- Girish Ahuja (a chartered accountant),
- Rajiv Memani (Chairman and Regional Managing Partner of Ernst & Young(EY) India)
- Mukesh Patel (practicing tax advocate),
- Mansi Kedia (Consultant at ICRIER) and
- G C Srivastava (retired Indian Revenue Service and advocate).
About CBDT
♦Â Central Board of Direct Taxes (CBDT) is the apex policy-making body of the Direct Tax department. It functions under the Department of Revenue of the Ministry of Finance.
♦Â Chairperson- Pramod Chandra Mody(since Feb 15, 2019).
♦Â Formation-Â 1944.
About DTC
♦Â The DTC seeks to consolidate and amend the law relating to all direct taxes, namely, income-tax, dividend distribution tax, fringe benefit tax and wealth-tax so as to establish an efficient economy, effective and equitable direct tax system which will facilitate voluntary compliance and help increase the tax-GDP ratio. It will eventually pave the way for a single unified taxpayer reporting system.
♦Â Features: Single code for direct taxes, use of simple language, reducing the scope for litigation, flexibility, ensuring that the law is reflected in a Form, consolidation of provisions, elimination of regulatory functions and Providing stability.
About income tax act,1961
♦Â Formed – April 1, 1962.