The Central government has announced a review of direct taxes, following an overhaul of indirect taxes, in a move that may impact one's tax rates and exemptions in coming years. The review came months after Prime Minister Narendra Modi observed that the income tax law was drafted 56 years ago and needed to be re-drafted. In a statement, the Finance Ministry said, “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 has constituted a task force.”
This team will be lead by Arbind Modi, member-legislation in CBDT. Along with Modi, other members of the panel will include chief economic advisor Arvind Subramanian as a permanent special invitee, along with GC Srivastava, former IRS officer and advocate, Rajiv Memani, chairman and regional MD at consulting firm Ernst & Young, chartered accountant Girish Ahuja, tax lawyer Mukesh Patel, Mansi Kedia, consultant of think tank ICRIER.
The task force has six months to submit its report. It is mandated to draft a law that is in line with tax laws prevalent in other countries and that incorporates international best practices. “This steadfast focus will enhance India's competitiveness and make the country future ready,” said Memani. Tax experts said the focus should be on ways to reduce litigation by making the tax regime more predictable, while reducing the rates along with exemptions, especially for corporate sector.
