During Rajaswa Gyan Sangam held on 1st and 2nd September, 2017, Honourable Prime Minister had observed that the Income-tax Act, 1961 (the Act) was drafted more than 50 years ago and it needs to be redrafted.
Accordingly, in order to review the Act and to draft a new direct tax law in consonance with economic needs of the country. The Government vide Press Release dated 22nd November 2017 have informed about creation of the Task force which includes members of Central Board of Direct taxes, professional from Chartered Accountant and Legal fraternity.
The Terms of Reference of the Task Force is to draft an appropriate direct tax legislation keeping in view
- The direct tax system prevalent in various countries
- The international best practise's.
- The economic needs of the country and
- Any other matter connected thereto
The Task force is expected to submit its report to the Government within Six months.
Yes it is a welcome step to look into Direct Tax regime with a new eye, as India is on a growth trajectory whereby according to IMF statistics growth of Indian economy is expected to 7.2% and 7.7% in fiscal years 2017-18 and 2018-19 respectively. Though we feel while drafting the new direct tax regime the task force should also consider settled judicial pronouncements whereby not creating new litigation's on same settled issues.
Especially with the Goods and Service Tax (GST) bite just being served by the Government, which though is yet to be stabilised and digested by the Nation at large, we believe that the government should not rush with release of New Direct tax legislation and take into consideration the bottle necks faced with regards to legal interpretation and practical implementation by Nation at large with implementation of GST a new face of the Indian Indirect Tax regime !