Lok Sabha Question No. 4576 (UNSTARRED), answered on 2016-08-12
Subject: Direct Tax Laws
Ministry: FINANCE
Asked by: DUSHYANT SINGH

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE LOK SABHA

UNSTARRED QUESTION No. 4576

TO BE ANSWERED ON FRIDAY, THE 12 th   AUGUST, 2016

21, SRAVANA, 1938 (SAKA)

## DIRECT TAX LAWS

## 4576. SHRI   DUSHYANT SINGH:

Will the Minister of FINANCE be pleased to state:

- (a) the  details  of  the  various  recommendations  made  by  Easwar  Panel  in  its  first  report  on improving Direct Tax Laws in India;
- (b) whether the Government has accepted these recommendations and also implemented them by making changes in the concerned laws;
- (c) if so, the details thereof including the list of recommendations accepted; and
- (d)   if not, the reasons therefor?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SANTOSH KUMAR GANGWAR)

(a)   The recommendations of Easwer Panel relating to improving the Direct Tax Laws in India inter-alia includes rationalization  of provisions relating to  maintenance of books of accounts and tax  audit;  disallowance  of  expenditure  incurred  on  earning  exempted  income,  increase  the eligibility  limit  for  presumptive  taxation  for  small  business  from  one  crore  rupees  to  two  crore rupees;  introduction  of  presumptive  taxation  for  professionals;  providing  clarity  regarding taxability of surplus on sale of shares & securities; rationalization of section 50C of the Incometax Act,1961 ('the Act') to provide relief where sale consideration fixed under agreement to sell; deletion  of  section  56(2)(vii)(b)(ii)  of  the  Act;  re-opening  of  assessment  on  account  of  audit objections,  rationalisation  of  provisions  relating  to  interest  and  refund,  rationalization    of  time limit for rectification of order by appellate tribunal, widening the scope of disposal of appeals by the single member benches of tribunal, prescribing time limit of one year for disposal of petitions for waiver of penalty and interest;  rationalisation  of provisions relating to penalty and attachment of property; enhancement and rationalisation of the threshold limits and reduction of the rates of TDS;  deferment  of  ICDS;  exemption  to  non-residents  not  having  Permanent  Account  Number (PAN), but who furnish their Tax Identification Number (TIN) in their country of residence from the applicability of TDS at a higher rate under section 206AA of the Act etc.

(b)  The Government after due examination of the Committee's report has accepted most of the recommendations  and  implemented  the  same  by  suitably  amending  the  concerned  laws  and through issuance of circular, Press release and instructions.

(c) Based on the interim report of the Committee, various legislative/administrative changes have been  made  which  inter-alia  including  increase  the  eligibility  limit  for  presumptive  taxation  for small business from one crore rupees to two crore rupees; introduction of presumptive taxation for professionals; providing clarity on taxability of surplus on sale of shares &  securities; rationalization of section 50C of the Act to provide relief where sale consideration is fixed under agreement to sell;  providing time limit for giving appeal effect to appellate orders, reducing the time limit of rectification of order by appellate tribunal, increasing the income limit for appeals being disposed by single member bench of the appellate tribunal, providing time limit for disposal of petitions made by the assessees for waiver of penalty and interest under the Act, providing for release of property attached under section 281B of the Act on submission of bank guarantee by assessee, rationalisation of penalty provisions;  enhancement and rationalisation of the threshold limits  and reduction of the rates of TDS; Deferment of ICDS;  Exemption to non-residents not having  Permanent  Account  Number  (PAN),  but  who  furnish  their  Tax  Identification  Number (TIN) in their country of residence from the applicability of TDS at a higher rate under section 206AA of the Act etc.

(d)  It  may  be  noted  that  most  of  the  recommendations  have  been  accepted.  However  certain recommendations  such  as    deletion  of  section  56(2)(vii)(b)(ii)  of  the  Act;  rationalisation  of provisions relating to  maintenance of books of accounts and tax audit etc has not been accepted as  the  same  were  not  found  feasible  in  view  of  the  current  direct  tax  policy  thrust  of  the Government  to  curb  black  money,  potential  revenue  loss  and  lack  of  fiscal  space  for  such measures.

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