NEW DELHI, May 16: The government will introduce a Bill for rationalising and simplifying the Income Tax law in Winter Session of Parliament.

Finance Minister P Chidambaram, while addressing a meeting of the consultative committee attached to his Ministry on Friday, said that the new Bill would incorporate the suggestions of the expert group which was constituted to examine the existing income tax structure and suggest changes in the tax laws.

The Minister further said that the working draft of the report, which was submitted to government, would be put to public debate before the introduction of the Bill in Parliament. The Finance Ministry has already placed the copies of the expert group report in Parliament library.

The Finance Minister further said that the main purpose of the exercise was to have low rate of taxation, automacity of compliance and selective interference by the government.

The expert group, it may be recalled, among other things has suggested phasing out of all tax exemptions and deductions and putting in place a simple and intelligible tax laws with reasonable rates. The group has made far reaching changes which include uniform accounting year, abolition of the system of clubbing of income of spouses and minors, scrapping of annual value concept for computing income from house property, taxing of rental income of receipt basis, deletion of Minimum Alternative Tax (MAT) and streamlining of depreciation norms.

The Minister also told the members that the Income Tax Department would be launching a multi-media campaign to educate the masses about the tax laws in a bid to improve voluntary compliance.

The Finance Minister further said that the government would formulate a comprehensive service tax law to guide the tax payers.

The provisions of service tax on the ten identified services, as introduced in the Finance Bill 1997, have been put on hold pending finalisation of the modalities for collecting the tax. The Finance Ministry proposes to consult various associations before imposing the service tax.

The government, it may be mentioned, is keen on widening the tax net by including various services in the tax net. Collectively, the services account for more than 40 per cent of the GDP and have by and large remained away from the tax net.

The members of the consultative committee, while appreciating the recommendations of the expert group, suggested that computerisation of the income tax assessees, allotment of unique permanent account number and deterrent punishment for willful tax evasion.

The members who attended the meeting were Subhash Chandra Baheria, Vijay Kumar Khandelwal, Nirmal Kanti Chaterjee, O P jindal, Suresh Prabhu, Prithviraj D Chavan, K R Malkani, Raghavji and Yerra Narayansamy. The Finance Ministry officials, including Revenue Secrertary N K Singh also attended the meeting.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.