In order to review the Income Tax Act, 1961 and to draft a new Direct Tax
Law in consonance with economic needs of the country, the Government of India in November 2017 has constituted a Task Force. Who among the following is made the convenor of it?

Question

Prepp Team · Accepted Answer

Understanding the Direct Tax Law Review Task Force

The Government of India periodically reviews its tax laws to ensure they remain relevant and effective in light of changing economic conditions and policy objectives. One such significant review was initiated in 2017, focusing on the primary direct tax legislation in the country.

The Task Force for Direct Tax Law Review

In November 2017, the Government of India constituted a Task Force. The main objectives of this Task Force were two-fold:

To review the existing Income Tax Act, 1961.
To draft a new Direct Tax Law that aligns better with the contemporary economic needs of the country.

This move aimed at simplifying the tax structure, reducing litigation, and making the tax system more compliant and efficient.

Convenor of the Task Force

A Task Force is typically led by a convenor who coordinates its activities, meetings, and report preparation. For the Task Force constituted in November 2017 to review the Income Tax Act, 1961 and draft a new Direct Tax Law, the convenor appointed was Shri Arbind Modi.

Let's look at the options provided:

Option	Name	Relevance (in this context)
1	Shri Arvind Subramanian	Was Chief Economic Advisor to the Government of India (served until 2018). Not the convenor of this specific Task Force.
2	Shri Arbind Modi	A former Member (Legislation) of the Central Board of Direct Taxes (CBDT). He was appointed as the convenor of the Task Force.
3	Shri Amitabh Kant	Served as CEO of NITI Aayog. Not related to the convenorship of this Task Force.
4	Dr. Bibek Debroy	Chairman of the Economic Advisory Council to the Prime Minister. Not the convenor of this Task Force.

Based on the composition and leadership of the Task Force announced in November 2017, Shri Arbind Modi, being a seasoned expert in direct tax legislation from the CBDT, was the designated convenor responsible for steering the review and drafting process.

Importance of Reviewing Income Tax Act, 1961

The Income Tax Act, 1961 is a foundational law for direct taxation in India. Over decades, numerous amendments have been made to it, sometimes leading to complexity and potential ambiguities. Reviewing and potentially drafting a new law helps in:

Simplifying the tax code.
Incorporating best international practices.
Addressing new forms of income and business models arising from economic evolution.
Reducing compliance burden for taxpayers.
Minimizing tax disputes and litigation.

The Task Force led by Shri Arbind Modi played a crucial role in suggesting reforms to achieve these goals in the direct tax system.

Revision Table: Key Details

Aspect	Detail
Purpose of Task Force	Review Income Tax Act, 1961; Draft new Direct Tax Law
Constituted In	November 2017
Convenor	Shri Arbind Modi
Goal	Consonance with economic needs of the country

Additional Information: Direct Taxation in India

Direct taxes are taxes levied directly on the income, wealth, or profits of individuals and organizations. In India, the primary direct taxes are Income Tax and Corporation Tax. The legal framework for these is primarily the Income Tax Act, 1961.

Income Tax: Levied on the income of individuals, Hindu Undivided Families (HUFs), firms, LLPs, etc.
Corporation Tax: Levied on the income of domestic and foreign companies operating in India.

Direct taxes are a significant source of revenue for the government and are designed to be progressive, meaning those with higher incomes or profits pay a higher percentage of tax. Regular review and reform of the Direct Tax Law are essential to keep pace with the dynamic economic environment, technological advancements, and global tax trends.