The task of overhauling the current tax law is learnt to have been completed but is being held to keep public expectations in check ahead of the Union Budget 2019-20.
"It (the new Direct Tax Law) is more or less complete. It should be out after the Budget as we are focusing on the Finance Bill," said an official without revealing the details. "Had the draft come now, it would have created unnecessary expectations," he added.
The official hinted that the new law would not only bring down the tax burden for salaried people but would also simplify the return filing process. This will result in increasing the taxpayer base.
The Task Force to draft the new law that replace the decades-old Income Tax Act on May 26 got a two-months extension to submit its report. The panel was first set up in November, 2017 after Prime Minister Narendra Modi observed that the present law was more than 50 years old and needed redrafting to make it contemporaneous.
Akhilesh Ranjan, a CBDT member, is the head of the Task Force. Its members include Girish Ahuja (chartered accountant), Rajiv Memani (chairman and regional managing partner of EY India), Mukesh Patel (Practicing Tax Advocate), Mansi Kedia (Consultant, ICRIER) and GC Srivastava (retired IRS and Advocate).
"This is the third attempt to redraft the income tax law. If the new law incorporates the settled law of various jurisdictional courts, it will be a perfect law. This will reduce a lot of litigation," said Riaz Thingna, director, Grant Thornton Advisory.
The UPA government led by Prime Minister Dr Manmohan Singh had also attempted to overhaul the tax law by introducing the direct tax code, but it could not see the light of the day.
( With inputs from IANS )