Income tax: CEA Arvind Subramanian reveals when direct tax reforms report is expected

Chief Economic Adviser Arvind Subramanian said that one of the India's biggest challenges is how to get more and more people pay income taxes. "I think that is very critical and we are really falling short on that. Any direct tax system must encourage voluntary compliance to get more and more taxpayers in and this is something we should be focusing on," he said.

Chief Economic Adviser Arvind Subramanian said that one of the India's biggest challenges is how to get more and more people pay income taxes. Image source: Reuters

Chief Economic Adviser Arvind Subramanian today said the task force on direct tax reforms will submit its report in the next 4-5 months. In November last year, the government had constituted a task force for redrafting the 50-year old income tax law in sync with the economic needs of the country. The six-member task force will have Arbind Modi, CBDT Member (Legislation) as the convener. Subramanian is a permanent special invitee in the task force. Replying to questions at the Jesus and Mary College here, Subramanian said that from a development perspective, "We need" to have more direct taxes.
"The government has set up a direct tax committee under Arbind Modi and I am a member of that as well, which is going to give recommendation on how to reform all direct taxes. You will have the report in next 4-5 months," he said.

The CEA said that one of the India's biggest challenges is how to get more and more people pay income taxes. "I think that is very critical and we are really falling short on that. Any direct tax system must encourage voluntary compliance to get more and more taxpayers in and this is something we should be focusing on," he said.

He was at the college to deliver a lecture on Economic Survey 2017-18.

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Prime Minister Narendra Modi, during the annual conference of tax officers in September, had observed that the Income-tax Act, 1961 was drafted more than 50 years ago and it needs to be redrafted.

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