

NEW DELHI: The government on Tuesday set up a 10-member panel to simplify the over 50-year-old Income Tax Act, a move aimed at ensuring certainty in tax policy for ease of doing business.

The panel, headed by retired Delhi high court judge R V Easwar, has also been tasked with identifying provisions and phrases in the I-T Act, which are leading to litigation due to different interpretations. The term of the committee is for one year and the first report is expected by January 2016. The government is likely to include some of the initial recommendations of the panel in the 2016-17 budget.

"We have been resolving a lot of past issues over the last few months and now time has come to look at some provisions of the I-T Act, to look at how their drafting quality can be improved in order to avoid ambiguity so that everybody is certain as to what the Act itself says," said finance minister Arun Jaitley.

The panel has also been asked to suggest alternatives and modifications to the existing provisions and areas to bring about predictability and certainty in tax laws, without substantial impact on the tax base and revenue collection.

Reforming the tax policies has been identified as a priority area by the Narendra Modi government after a spate of high-profile tax disputes dented India's image as an investment destination. Since assuming power in May 2014, the government has taken several steps to calm investor nerves on tax policy. While some cases have been resolved, the government has said it will "put to sleep" some other cases soon.

The other members of the panel are V K Bhasin, former law secretary, Vinod Jain, chartered accountant, Rajiv Memani, consultant, Ravi Gupta, senior advocate, Mukesh Patel, chartered accountant, Ajay Bahl, consultant, Pradip P Shah, investment adviser, Arvind Modi (IRS officer), and Vinay Kumar Singh (IRS officer).

The committee will set its own procedures for regulating its work and can also work in sub-groups and the draft prepared by these groups can then be approved by the whole panel. The panel will put its draft recommendations in the public domain and, after stakeholder consultations, the committee will formalize its recommendations, according to a finance ministry statement. Tax experts said the move to set up a panel to simplify tax laws would help assure investors about the certainty of tax policies.

"Setting up of a committee to review the I-Tax laws in India is a step in the right direction. The committee is expected to give its first set of recommendations by January 2016 and taxpayers can expect to see certain measures in next budget to further streamline the tax laws," Homi Mistry, partner, Deloitte Haskins & Sells LLP, said.

