Report on direct tax law by July 31

Hyderabad: The task force set up by the Central Board of Direct Taxes (CBDT) to draft a new direct tax law to replace the existing Income Tax Act, 1961, will be submitting its final report to the Centre by July 31, 2019.

The task force is expected to make tax-payer friendly suggestions in its report, which will be perused by the Government and in all likelihood, a new direct tax law will be in place by the next financial year (2020-21).

Prime Minister Narendra Modi is said to be keen on replacing the 58-year-old Income-Tax Act with the new one, in tune with the present-day economic scenario in the country.

According to the latest order issued by CBDT, the task force has been given a two-month extension and it has been asked to submit its report by July 31, 2019.  The task force which was constituted in November 2017 has already been given two extensions and the latest, sources said, is likely to be the last.

“A major portion of the work like studying the direct tax system prevalent in other countries and the best international practices has been completed. The task force is in the process of studying the economic needs of the country and related matters. Final touches are being given to the report,’’ IT officials told Deccan Chronicle.

“It was a herculean task to study all the aspects and come up with the final report. The task force will submit its report by July 31 and thereafter, the government think tanks will go through it. In all probability, the new direct tax law will be in place by the next financial year,’’ the IT source said.

In November 2018, the task force was reconstituted under Akhilesh Ranjan, Member (Legislation), CBDT after which senior IRS officer Pragya S. Saksena, Principal Commissioner of Income Tax (OSD), New Delhi was co-opted as member of the task force.

The reconstituted task force was required to submit its report to the Government by February 28, 2019 but was given an extension to May 31, 2019.

Officials said that the new finance minister Nirmala Sitharaman has monitored the progress of the task force.

During the annual conference of income tax officials in September 2017, Prime Minister Narendra Modi had stressed the need to redraft the existing Income Tax Act, 1961 as it was old and outdated.