It refers to setting up of a panel for drafting new Income Tax Act to replace the earlier one legislated way back in the year 1961. Earlier half-century old Act had lots of patch-works in form of amendments. New Income Tax Act should be drafted carefully on basis of past experience so that amendments may not be usually needed. It should be simple and practical rather than complicated and cumbersome Goods and Service Tax (GST) finding so many problems and changes in just four months of implementation.
Special Investigating Team (SIT) set up by Supreme Court on aspect of black money in its third report pointed out towards irregularities detected in name of ‘donations’, ‘charity’ and other such contributions. Already several Non-Government-Organizations (NGOs) have been under scanner for converting black money and hawala-operations. Schools are charging heavy amounts for admission in name of ‘donations’. Charitable trusts are formed with tax-exemption certificates for whitening black money. There is heavy loss to exchequer because of double-edged tax-exemption to political parties which are not complying with full-bench CIC-verdict for being accountable to public through RTI Act.
Best is to abolish altogether provisions under various sections of Income Tax Act for any type of contribution made to anybody. It will effectively check all tactics to whiten black money. Otherwise also huge revenue so earned will be available for public welfare and national development which in no way is less important than contributions, donations, charity and other aspects presently wrongly exempted under Income Tax Act.