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GST: Budget may set stage for new Income Tax Act - GST Station

GST: Budget may set stage for new Income Tax Act

GST: Budget may set stage for new Income Tax Act

The long-pending overhaul of the country’s direct tax laws could finally move forward later this year with the Goods and Services Tax (GST) now in place and the Union government backed by a huge majority, according to an article published in Business Line.

The Union Budget 2019-20 could signal the government’s intent to make moves in this direction, said the article. “There has been a move to redraw the Income Tax Act for some time and a committee was also set up. With the government now having a clear five-year mandate and the transition to GST almost complete, the focus will shift to the direct tax laws this fiscal,” said a person familiar with the development. The source said that this new direct tax focus could be mentioned in the Union Budget on July 5.

In November 2017, the Finance Ministry had set up a task force to draft direct tax legislation that considered the best international practices and the nation’s economic needs. The task force was reconstituted under Akhilesh Ranjan, Member (Legislation), Central Board of Direct Taxes, in November 2018. 

A two-month extension was given on May 27 this year and the final report is now expected on July 31. 

“Much of the work of the committee is now over, including holding discussions with the stakeholders. It is likely to submit its report within the time frame,” said the source.

The entire process will be time-consuming and the report is expected to require multiple reviews and a number of discussions. “The process of redrafting the income-tax law will take some time, as it was the case with the GST. A start may be made later this year, but it could take time to be completed,” said the source. 

In September 2017, Prime Minister Narendra Modi had highlighted that the Income Tax Act was over 50 years old and needed to be redrafted.

Source- Deccan Herald.