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.