New Delhi: A task force for redrafting the Indian Income Tax Act, 1961, to bring it in tune with the current economic needs and realities, was set up by the government on Wednesday, an official statement said.
The six-member task force will have Central Board of Direct Taxes' Member, Legislation, Arbind Modi as the Convener, with chartered accountant Girish Ahuja, consulting firm EY Chairman Rajiv Memani and ICRIER consultant Mansi Kedia as the other members.
"In order to review the Act and to draft a new direct tax law in consonance with economic needs of the country, the Government has constituted a task force," a Finance Ministry statement said, adding that the task force will submit its report to the government within 6 months.
Chief Economic Adviser Arvind Subramanian will be a permanent special invitee to the task force.
According to the statement, the committee has been asked to draft a direct tax legislation keeping in view the tax system prevalent in various countries, the international best practices and economic needs of the country.
The previous UPA government had brought in the Direct Taxes Code Bill, 2010, to simplify tax legislation for both individual taxpayers and corporates. However, it 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.
Last year, Finance Minister Arun Jaitley had promised to lower the corporate tax rate to 25 per cent in 5 years.
Currently, income for individuals up to Rs 2.5 lakh per annum is exempt from tax.