Income Tax Reforms: Nirmala Sitharaman informs about Direct Tax Code Bill, simplification of direct tax on cards

Income Tax Reforms: The Akhilesh Ranjan Committee submitted its report to replace the existing Income Tax Act 1961 with a new Direct Tax regime. Finance Minister Nirmala Sitharaman informed about the submission of the report today. So, with newly drafted Direct Tax Code Bill, the first step in income tax reforms sought by Prime Minister Narendra Modi at the annual tax conference of the Income Tax Officers in the year 2017 has been completed and now we can expect simplification of the direct tax regime in coming days.

Speaking on the need for income tax reforms and simplification of the direct tax system Vivek Jalan, Co-Chairman, Taxation Committee of Bengal Chamber of Commerce said, "The focus of the NDA government has been to bring about broad-based multi-dimensional tax reforms. Now that GST roll out has completed two years, the government is turning its attention to the reform of the Income Tax Act 1961 by overhauling it with a newly drafted Direct Tax Code Bill. The industry is now pinning its hopes for a simplified direct taxation regime. How much the economy benefits from the amended income taxation system will depend on how radical the undertaken reform is." 

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Speaking on the kind of new tax regime that the nation requires Jitendra Solanki, a SEBI registered tax and investment expert said, "Tax relief to corporates, simplification of the tax code on multiple fronts, reducing litigation and a faster disputes settlement mechanism are crucial reforms the industry and taxpayers are looking forward to."

At a time when the Indian economy is showing signs of a slowdown, it becomes immensely important to initiate measures that boost business and make them more competitive. In recent months, both the UK and the US have announced cuts in corporate tax to make businesses more profitable and attractive to investments as measures to boost growth. A business boon by default also creates more jobs, something the Indian economy needs right now.

Rest of the members of the Akhilesh Ranjan Committee were Girish Ahuja (CA), Rajiv Memani (Chairman and Regional Managing Partner at E&Y), Mukesh Patel (Tax Advocate), Mansi Kedia (Consultant, ICRIER) and GC Srivastava (Rtd. IRS and Advocate).