Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Direct Tax »
Open DEMAT Account in 24 hrs
 Income tax exemption: 4 financial instruments you can still invest into before March 31
 CBDT drops small tax demands but not TCS, TDS claims
 ITR Refund: Awaiting money from Income Tax? Here's why you have not yet received your amount
 Income Tax Notice: What to do if you receive a Section 143 (1) notice from taxman?
 Average tax return processing time cut to 10 days: CBDT
 7 types of Income Tax Notice ITR filers may receive for AY 2023-24
 ITR filing: Do these advance preparations before filing your income tax return
 What are the strategies to maximize tax refunds after submitting an income tax return (ITR)?
 ITR filing: Tax rules on income from house property that your should know
 CBDT likely to issue rules on angel tax next week
 Pension Taxation: Everything you need to know for ITR filing

Direct tax committee calls for major changes to reassessment rules
August, 21st 2019

The government-constituted task force for re-writing the direct tax legislation has suggested major changes in provisions for reopening and reassessment, in a bid to reduce litigation, said a source privy to the development.

The panel on the Direct Tax Code (DTC) proposed amendments in Section 147 and Section 148 of the Income-Tax (I-T) Act, empowering the tax officer to reopen assessment cases based on pre-defined criteria. The I-T officer can go back up to six years to scrutinise the books of accounts of the assessees.

Currently, these provisions are prone to the interpretation. Forty per cent of litigation happens because assessees challenge reasons given by officers for reopening cases, the source said.

The panel has recommended increasing the threshold limit for opening cases; currently it is Rs 1 lakh and above. Also, the pre-defined criteria to select cases for scrutiny will be tightened.

Several intricate issues also emerge during reassessment, leading to cases piling up before the CIT. According to the latest data, there are tax-related disputes to the tune of Rs 6 trillion.

Sources said the panel had suggested reopening cases should be supported by proper reasoning. Often cases are reopened due to information received from banks, financial institutions, and other sources.

The panel had also incorporated some suggestions of the previous Arbind Modi committee. But, cutting corporation tax to 15 per cent is not in its report, said sources.

Sources also said the panel has made suggestions for tax compliance based on global trends and best practices. This is expected to increase clarity among taxpayers and also expand the tax base.

The United Progressive Alliance (UPA) government had also made an attempt to reform the age-old taxation system by introducing the DTC, aimed at integrating all direct tax laws.
The old DTC Bill had proposed an annual income tax 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 for incomes above Rs 10 lakh. The Bill was introduced in 2010. It was then referred to Parliament’s standing committee on finance.

After the parliamentary panel’s recommendation, the UPA government, at the fag-end of its tenure, had put the revised draft on the public domain in March 2014.

The National Democratic Alliance government, too, believes that the I-T Act, which was drafted almost 60 years ago, needs an overhaul, but at the same time it should be in sync with the economic circumstances of the country.

In November 2017, the government had constituted a task force, which was to submit its report within six months.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting