Centre to disclose Income Tax Act to remove complexities soon, says Hasmukh Adhia

The country's Income Tax Act has become "unwitty and complex" after going through numerous "aberrations" over the period of time and the Centre will soon come up with a roadmap to execute important changes and remove such complexities, Revenue Secretary Hasmukh Adhia said on Saturday.

According to him, the Centre will soon disclose the changes in the IT Act as well as its execution.

"The government is of the firm belief that Income Tax law needs some very important changes and we are seized of the matter. We will soon disclose what changes are required and how will it be done (in the IT act)," he said.

"Unfortunately the Income Tax Act which was written many years ago has undergone so many aberrations, so many changes, that it has become unwitty and complex, we need to undertake the wholesale job of removing such things and this is the right time to do it," Adhia said.

The Revenue secretary was speaking at the conference, 'Round table on Tax Reforms' organised by Gujarat Chamber of Commerce and Industry and All Gujarat Federation of Tax Consultants in presence of Central Board of Direct Taxes chairperson Anita Kapur and CBDT Member Legislation and Computerisation Rani Singh Nair.

"The country has many expectation from the upcoming budget, the growth rate of the country also needs to be taken forward. When we have to give a fresh budget which can push the growth we require lot of new ideas. That is why we are going to different parts of the country," Adhia said.

"When the whole country wants growth, when the Prime Minister has set the ambition of a double digit growth, we need real innovative ideas, we really need out of the box thinking, beyond the incrementalism," Adhia said on tax reforms.

"But so far probably we have not achieved a major shift in our approach, some kind of breakthrough initiative has not come... we want some big bang ideas," Adhia told business heads and top tax consultants of Gujarat. 

After the discussions which continued for over two hours, Adhia highlighted the steps that his department is considering to tackle what is being described as 'tax terrorism'. He said CBDT will have to issue circulars from time to time so that IT assesses officers can act according to those circulars and not make assessments on their sweet will.

Adhia added that his department will increase the number of benches of authority of advance ruling so that foreign investors and also domestic ones know what they can expect in form of tax payments here.

Further, the revenue secretary said that he has suggested to form a mechanism to resolve the huge backlog of pending tax assessment cases by forming a high-level committee in each state or by the way of one-time settlement camps.

He also said the revenue department is coming up with the idea to stop direct interface between IT officers and taxpayers as every query or documents will have to be sent through emails only.

"All exchange of information should be through email. It will have electronic record and unnecessary harassment will stop," he added.

"We need to have more accountability in the department. We will be tracking each and every assessment order passed by officer till they go the level of Supreme Court to see how many of them can pass the test of legal scrutiny," Adhia said.

He ruled out the demand of the GCCI's Mukesh Patel for linking tax exemption to inflation. He also said that the Direct Taxes Code (DTC) which was introduced by the former Congress government has been put on hold as there were many discrepancies in it.

Meanwhile, Kapur said in the last few months they (CBDT) have issued 16 circulars to streamline the functioning of the tax collections.