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Central Govt To Introduce New Tax Within Six Month :The Alert India

Edited by: Alert India  Desk, New Delhi [ Published on: November 23, 2017  22:42 IST ]

Narendra Modi and economists have put their heads together yet again to come up with a major reform change in the financial rules of the country.

After switching to the new indirect tax regime of the GST, the Narendra Modi government has formed a task force to draft a new Direct Tax law to meet the changing economic needs of the country. The Task Force in the next six months will submit its report to the government on how to fix the more-than-50-year-old Income Tax Act, 1961. While, simplification and better administration of the law are major reforms that India needs, according to economists; some even suggest going for a flat tax system or lower tax system.

An attempt to redraft the Income Tax Act was also made by Congress’ P Chidambaram in 2009 through the Direct Taxes Code (DTC). It proposed simpler tax code and did away with unnecessary exemptions and created space for lower tax rates. However, the bill lapsed with the dissolution of the 15th Lok Sabha in 2014. The NDA government, since coming to power in 2014, has already implemented general anti-avoidance rules GAAR. In 2016 Finance Minister Arun Jaitley also promised to lower corporate tax rate to 25% in 5 years. Currently, income up to Rs 2.5 lakh per annum is exempt from tax for individuals.

Today the finance minister formed a task forced led by Central Board Of Direct Taxes member Arbind Modi to review the Income Tax Act, 1961 and to formulate a new direct tax law.

The task force had been given six months to submits its report to the center.

Hence a decision on the tax law overhaul is unlikely in the 2018-19 Union Budget.

 

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