New Delhi, Nov 23 - The Income Tax Act, 1961 will be read "chapter by chapter" by the new task force constituted for drafting a new direct tax legislation, Finance Secretary Hasmukh Adhia said on November 23.
In an interaction with select Editors, he said while some of the good provisions of the direct taxes code prepared by the previous government have already been incorporated in the income tax law, a need has been felt for complete revamping of the IT act.
The Task force will be reading "chapter by chapter" the IT act and recommend changes. "With moderate tax rates, we will not need so many provisions relating to exemptions under chapter 10 and the like," he said.
After changes, the law will continue to be called the Income Tax Act and there was no proposal to name it Direct Taxes Code.
On November 23, while announcing constitution of the task force of which Arbind Modi, Member (Legislation), CBDT, will be the Convenor, the government said during the Rajaswa Gyan Sangam held on September 1 and 2, Prime Minister Narendra Modi had observed that the Income-tax Act drafted more than 50 years ago, needs to be re-drafted.
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 constituted the Task Force.
Apart from Arbind Modi, it will have Girish Ahuja, practicing Chartered Accountant and non-official Director, State Bank of India, Rajiv Memani, Chairman and Regional Managing Partner of E&Y, Mukesh Patel, Practicing Tax Advocate, Ahmedabad, Mansi Kedia, Consultant, ICRIER and G.C. Srivastava, retired official of the IRS 1971 Batch and Advocate as its members.
Dr. Arvind Subramanian, Chief Economic Adviser (CEA), will be a permanent Special Invitee in the Task Force.
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 practices, the economic needs of the country and any other matter connected thereto.