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Task force to review I-T laws seeks stakeholder comments by Apr 2

New Delhi, Mar 21 (PTI) The task force formed to draft a new direct tax law today sought stakeholders feedback on their experience of filing income returns on the I-T portal as well as scrutiny procedure and levy of penalty. In November 2017, the government had constituted a six-member task force under CBDT Member Arbind Modi to draft a new direct tax law to replace the existing Income Tax Act, which has been in force since 1961. "In this endeavour of drafting the new tax law, it is imperative to engage with stakeholders and general public," the Central Board of Direct Taxes (CBDT) said in a statement while inviting suggestions from stakeholders. The task force has been asked to draft the law in consonance with the economic needs of the country. Stakeholders can email their feedback to rewriting-itact@gov.in by April 2. As per the feedback form, the task force has asked stakeholders to give their opinion in yes/no format along with their comments on five major points-- filing of return of income, tax credit, processing/scrutiny of return, litigation and recovery of disputed tax demand, penalty and prosecution. The form also seeks any other suggestion as may be desired by the stakeholder. Some of the queries put forward in the feedback form include whether the taxpayer could fill return forms ITR-1 (Sahaj)/ ITR2 for non-business taxpayers without any help from a professional/ tax return preparer? Queries like any difficulty in e-filing of the return of income (ITR 1 to 7) and also whether IT return should have a separate column for exempt income have also been put before the stakeholders. With regard to processing and scrutiny of return, the task force asked if the taxpayer is satisfied with present system of centralised processing of return in terms of its time and online communication with the Centralised Processing Centre. Also, there is a query on whether refunds were being processed timely and correctly.

With regard to penalty and prosecution, the task force sought to know peoples views on levy of penalties for various defaults under the Income-Tax Act, and also whether prosecution for Tax Deducted at Source (TDS) is being launched in an appropriate manner.

Prime Minister Narendra Modi, during the annual conference of tax officers in September, had observed that the Income Tax Act, 1961 was drafted more than 50 years ago and it needs to be redrafted.

The task force, which was mandated to submit its report within six months, would draft direct tax laws in line with tax laws prevalent in other countries, incorporating international best practices, and keeping in mind the economic needs of the country.

Former finance minister P Chidambaram had in 2009 proposed the original direct taxes code to replace the cumbersome IT law with a clean new law and to embody the principle of keeping taxes low and removing exemptions.

Arbind Modi had assisted the former finance minister in preparing the code. However, the DTC bill, that underwent many changes, was not passed by Parliament.

The Direct Taxes Code (DTC) Bill, 2010, which was introduced in Parliament in 2010, lapsed with the dissolution of the 15th Lok Sabha.

The Bill had proposed annual I-T exemption limit at Rs 2 lakh, and levying 10 per cent tax on income between Rs 2 lakh and Rs 5 lakh, 20 per cent on Rs 5-10 lakh and 30 per cent above Rs 10 lakh. For domestic companies, it suggested tax rate of 30 per cent of business income.

Currently, income up to Rs 2.5 lakh per annum is exempt from tax for individuals. PTI JD ABM ABM