7 Reasons to Include CMAs as “Accountants” in Income Tax Bill 2025
The New Income Tax Bill 2025, introduced in the Lok Sabha on February 13, 2025, aims to simplify the complex Income Tax Act of 1961. One of its key objectives is to reduce tax disputes and litigation while ensuring ease of compliance. Given the evolving taxation and compliance landscape, professional bodies like the Institute of Cost Accountants of India (ICMAI) and the Institute of Company Secretaries of India (ICSI) have urged their inclusion in the definition of an "Accountant" under the new bill.
Industries and businesses today require a diverse pool of qualified professionals to handle taxation and compliance, reducing dependency on a single profession and fostering a competitive, quality-driven tax ecosystem. Here’s why CMAs must be included in the definition of “Accountant” under the Income Tax Bill, 2025:
1. ICMAI: A Recognized Accounting Body with Global Affiliations
The Institute of Cost Accountants of India (ICMAI) is a statutory body established by an Act of Parliament, making it an officially recognized accounting profession. ICMAI is affiliated with:
? International Federation of Accountants (IFAC) – the global accounting standard-setter. ? Confederation of Asian and Pacific Accountants (CAPA) and South Asian Federation of Accountants (SAFA).
Moreover, CMAs are already authorized auditors as per Section 2 of the Cost and Works Accountants (CWA) Act, proving their competence in financial reporting and taxation matters.
2. Extensive Coverage of Income Tax Laws in the CMA Curriculum
CMAs undergo rigorous training in taxation, making them well-equipped to handle direct and indirect tax compliance. The ICMAI curriculum extensively covers:
?? Intermediate Level:
?? Final Level:
This structured tax education prepares CMAs to effectively interpret and apply tax laws, ensuring compliance for businesses.
3. ICMAI’s Robust Disciplinary & Regulatory Mechanism
To maintain professional integrity and ensure high-quality tax and auditing services, ICMAI has implemented strict regulatory frameworks, including:
?? Code of Conduct – ensuring ethical professional practices.
?? Peer Review Mechanism – maintaining service quality across professionals.
?? Quality Review Board (QRB) – enhancing audit quality for CMAs.
This self-regulatory framework aligns with the ethical and compliance standards required for tax professionals under the Income Tax Act.
4. Parliamentary Committee Recommendations for Inclusion of CMAs
The push for CMAs’ inclusion in the Income Tax Act is not new. Various Parliamentary Committees have recommended this change in multiple reports:
?? 49th Report of the 15th Lok Sabha (Direct Taxes Code Bill, 2010).
?? Direct Taxes Code (DTC), 2013.
?? 122nd Report of the Parliamentary Standing Committee on Commerce (Ease of Doing Business - December 2015).
The repeated recommendations indicate that CMAs have the necessary expertise to contribute meaningfully to tax administration and compliance.
5. Recognition of CMAs Under Other Major Statutes
CMAs are already recognized as tax professionals under several key Indian laws, making their exclusion from the definition of "Accountant" under the Income Tax Bill, 2025, inconsistent. CMAs are authorized under:
? Goods and Services Tax (GST) – CMAs provide audit and compliance services.
? Companies Act, 2013 – Recognized as Internal Auditors under Section 138.
? Cooperative Societies Acts – Authorized in Karnataka, Maharashtra, Himachal Pradesh, and West Bengal.
? Tax Return Preparer (Amendment) Scheme, 2018 – Allowed to file tax returns.
? Income Tax Act – Recognized as Authorized Representatives and for Inventory Valuation Audit (Section 142A).
? Regulatory Authorities – Recognized by RBI, IRDAI, SEBI, MCA, IBBI, CCI, NABARD, NSDL, and various Ministries.
Since CMAs already play a crucial role in financial auditing, taxation, and regulatory compliance, their inclusion as "Accountants" in the Income Tax Act is logical and necessary.
6. Inclusion of CMAs Will Ensure Healthy Competition in Tax Practice
A healthy competitive environment in taxation services benefits both taxpayers and tax administrators. Including CMAs will:
?? Prevent monopolization of tax-related services.
?? Enhance service quality due to increased professional competition.
?? Reduce compliance costs for MSMEs by ensuring competitive pricing.
?? Improve efficiency in tax administration with more professionals handling taxation and audit work.
In an open economy, enabling multiple qualified professionals to operate strengthens the taxation ecosystem.
7. CMAs' Techno-Commercial Expertise Enhances Tax Administration
CMAs bring unique techno-commercial expertise, offering value-added tax and audit services beyond traditional compliance checks. Their analytical skills help in:
?? Data-driven tax audits improving financial transparency.
?? Identifying revenue leakages and improving tax collections.
?? Supporting strategic tax planning for businesses, enhancing compliance.
Moreover, increased availability of professionals will lead to:
? Timely tax filings, reducing deadline extensions.
? Better support for MSMEs, ensuring seamless compliance.
? Optimized tax administration, benefiting both taxpayers and the government.
CMAs' Role in India's Vision for a $5 Trillion Economy
Honorable Prime Minister Narendra Modi has set a vision for a $5 trillion economy by 2025, with a strong, efficient tax mechanism playing a key role in achieving this target. The inclusion of CMAs in the Income Tax Act is crucial for national economic growth.
Additionally, India’s Vision 2047 (Viksit Bharat) emphasizes inclusive economic development. Expanding the role of CMAs aligns with this progressive vision, ensuring that more qualified professionals contribute to:
?? Effective tax administration.
?? Greater transparency in financial reporting.
?? Stronger compliance and regulatory frameworks.
Conclusion: Time for Change – Let’s Strengthen India’s Tax Ecosystem
CMAs are already recognized under multiple laws, contribute to regulatory compliance, and offer extensive expertise in taxation. Their inclusion in the definition of "Accountant" under the Income Tax Bill, 2025, will:
? Strengthen the tax ecosystem by increasing qualified professionals. ? Reduce dependency on a single profession, promoting fair competition. ? Enhance tax compliance, auditing, and administration efficiency. ? Support MSMEs with cost-effective tax solutions. ? Ensure transparency and accuracy in tax filings.
As we move towards a $5 trillion economy and beyond, empowering Cost Accountants is not just beneficial—it is essential.
Let’s work together for a stronger, transparent, and inclusive tax system. ????