August 16, 2019

New Direct Tax Code to overhaul the Income Tax Act, 1961

[ by Legal Era News Network ]


A finance ministry-appointed task force is drafting a new direct tax code that will replace the Income Tax Act, 1961 and will give its report to Finance Minister Nirmala Sitharaman by 19th August, 2019. The panel is led by Central Board of Direct Taxes (CBDT) member Akhilesh Ranjan.

The aim of the new direct tax code is to simplify tax law provisions, improve certainty and predictability of the law and reduce litigation and expeditious disposal of appeals. The expert panel is trying to make the direct tax law more sophisticated and capable of dealing with new business models in the digital economy.

The code will also strive to expand the tax base as the tax compliance in the country is quite low.

According to the Finance Minister, post the improvement in government’s revenue position, corporate tax rate will be cut to 25% for all companies.

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