The Income Tax Act 1961 is the charging statute of Income Tax in India. It provides for levy, administration, collection and recovery of Income Tax. The government of India had brought a draft statute called the “Direct Taxes Code” intended to replace the Income Tax Act,1961 and the Wealth Tax Act, 1957. However, the bill was later scrapped.
The government of India presents the Budget in February every year. The Budget, among things, is also used to introduce amendments to the Income Tax Act,1961 such as revision in tax slabs rates. The amendments are generally applicable to the following financial year beginning April 1, unless otherwise specified. Such amendments become part of the income tax act after the approval from the president of India.
“The Taxation Laws (Second Amendment) Act, 2016” is an amendment Act, No.48 of 2016, to Income-tax Act, 1961 and The Finance Act, 2016. It was passed during the 2016 Winter Session of Indian Parliament. The Taxation Laws (Second Amendment) Bill, 2016 was passed in Lok Sabha as a money bill on November 29, 2016, enabling people to declare their undisclosed incomes after the demonetisation of Rs 500 and Rs 1,000 notes.
The Taxation Laws (Second Amendment) Bill, 2016, was introduced in the Lok Sabha during the 2016 Winter Session of Indian Parliament. The bill was introduced on November 28, 2016, by then finance minister Arun Jaitley. The bill was passed by Sumitra Mahajan, with a voice vote without debate in Lok Sabha. The government clarified that gold asset in form of jewellery of people of India was not for taxation, as per the introduced Bill. The Opposition parties expressed anger that the bill was passed in the Lok Sabha without any debate.
The partial budget which is presented for Non Full financial year (generally in the year of General Election in India) is called a vote on account. This is presented for the sake of continuation of those compulsory expenditures of the government which are necessary for the smooth functioning of the Country and a full-fledged budget is presented after a new government is formed.
Union Government then set up the Arbind Modi-led panel to overhaul and simplify income tax laws. On November 22, 2017, the government formed a task force to draft a new direct tax law to replace the existing Income Tax Act, which had been in force since 1961. Arbind Modi, Member, Central Board of Direct Taxes (CBDT), was to lead a six-member panel with Chief Economic Advisor Arvind Subramanian as a permanent special invitee on the panel.
Schedules to the Income Tax Act 1961 are various annexures that were added and amended to include topics and scenarios which were not previously covered. Various schedules have since been added to the Income Tax Act at different points of time, to make the IT Act more inclusive and comprehensive.