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Informist, Wednesday, Feb. 19, 2025

 

--ICAI president: To give feedback to CBDT on Income Tax Bill 2025 by Mar 10 
--CONTEXT: ICAI President Nanda briefing media on FY26 action plan 
--ICAI president: Formed panel to study Income Tax Bill on CBDT direction 

 

NEW DELHI – The Institute of Chartered Accountants of India has set up a committee to study the new Income Tax Bill, 2025, as per a direction of the Central Board of Direct Taxes, Charanjot Singh Nanda, president of the body, said Wednesday. "Thirty nine chartered accountants will study the Bill and refer it to a five-member select committee (of the chartered accountants' body) for further discussion," Nanda said. The body will submit its report to the CBDT by Mar. 10, when Parliament's Budget Session resumes after the current recess.

 

According to the newly elected president of the chartered accountants' body, the CBDT had asked the Institute of Chartered Accountants of India earlier this month to form a panel to study the Bill and submit feedback to the government.

Finance Minister Nirmala Sitharaman presented the new Income Tax Bill with "substantial" changes to the Income Tax Act, 1961. Nanda, however, said there is scope for further simplification and that necessary recommendations will be put forward.

 

Announced in the Budget for the financial year 2024-25 (Apr-Mar), the new Bill aims to simplify the Income Tax Act, 1961, and make it easier for taxpayers to calculate their taxes and file their returns. Following the announcement, the CBDT set up an internal committee in October to carry out a comprehensive review of the Income Tax Act.

 

The tax department has also been inviting public comments for the review of the Income Tax Act since last year through a special online portal. The chartered accountants' body will submit its report on the same portal.

 

The Institute of Chartered Accountants of India is a statutory body established under the Chartered Accountants Act, 1949, and functions under the administrative control of the Ministry of Corporate Affairs.

 

The draft Income Tax Bill, 2025, has 536 sections and 23 chapters spread across 622 pages, 201 pages fewer than the 1961 Act. The document has been shortened primarily by removing explanations. Procedurally, it aims to give greater autonomy and power to the income tax department and government to bring about policy changes and amnesty schemes for taxpayers. The government, however, will have to lay these notifications before each House of Parliament after issuing them.

 

After Sitharaman tabled the Income Tax Bill, 2025, the Institute of Company Secretaries of India and the Institute of Cost Accountants of India demanded that their members be also treated as accountants in the Bill, with their operational demand being the right to carry out tax audits.

 

Nanda had a different view and said only chartered accountants should be allowed to conduct tax audits. "Tax audit is our (chartered accountants') forte," he said. Both the Institute of Company Secretaries of India and the Institute of Cost Accountants of India were also set up by Acts of Parliament and function under the purview of the corporate affairs ministry.

 

Detailing the vision for FY26, Nanda said the focus of the Institute of Chartered Accountants of India will be to maintain and improve the quality of audits, while ensuring the security and operational freedom of accountants. One of the key initiatives that the newly formed governing council will undertake is to formulate a disciplinary action framework, which will detail and lay down standard operating procedures for dealing with chartered accountants who are found to be at fault. This will ensure "robust and timely" disciplinary action, he said.

 

The Institute of Chartered Accountants of India had set up a framework in 2007 to identify and address misconduct by chartered accountants. Under its ambit, 2,771 disciplnary cases have been taken up so far. Of these, hearing has been completed in 2,354 cases, and accountants have been found guilty in 1,072 cases, Nanda said.

 

The call for a disciplinary action framework comes at a time when the Institute of Chartered Accountants of India has been criticised for its poor track record of disciplinary steps, prompting the government to form a separate body called the National Financial Reporting Authority. Formed under the Companies Act, 2013, the National Financial Reporting Authority oversees accounting functions performed by companies and audit functions performed by auditors.  End

 

Reported by Priyasmita Dutta

Edited by Rajeev Pai

 

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