Former Finance Secretary urges to include CMAs and Company Secretaries in Tax Audit amid opposition of ICAI:

Former Finance Secretary urges to include CMAs and Company Secretaries in Tax Audit amid opposition of ICAI Former Finance Secretary Subhash Chandra Garg stood for the inclusion of Cost Management Accountants (CMAs) and Company Secretaries in the term of 'accountants' in the Income Tax Bill of 2025. Garg believes that these professionals have the experience needed to perform effective tax audits, which would not only increase audit quality but also lower compliance costs for firms. He underlined that CMAs and Company Secretaries are extremely capable of performing tax audits, and their participation would result in a more effective and accessible tax system. The proposal to broaden the definition of 'accountants' in the Income Tax Bill, 2025, has gained significant traction, with professional bodies such as the Institute of Cost Accountants of India (ICMAI) and the Institute of Company Secretaries of India (ICSI) backing the move. These organisations have explicitly requested that the government to include their members as qualified experts to perform tax audits. In a memorandum to the Lok Sabha Select Committee, ICMAI requested that the term 'Cost Accountant' be included in Section 515(3)(b) of the Income Tax Bill. The bill, tabled by Finance Minister Nirmala Sitharaman in February 2025, seeks to reform India's direct taxation system by simplifying regulations, minimising litigation, and encouraging voluntary compliance. Garg, who helped shape India's financial sector, has long advocated for reforms that aim to increase efficiency and lower compliance costs. He claims that confining tax audits to Chartered Accountants (CAs) does not fully leverage the experience of other qualified professionals. The tax audit should be viewed as a legal duty for guaranteeing transparency and compliance, rather than as the sole realm of Chartered Accountants. We would increase audit quality by increasing the pool of certified professionals to include CMAs and Company Secretaries, while also ensuring that firms are not saddled with excessive compliance fees. Garg's remarks have supported an ongoing effort to extend the definition of 'accountants' in the Income Tax Bill, which aims to streamline India's tax structure while adapting to the changing economic landscape.

ICAI Opposes the Proposal

Given Garg's support, the Institute of Chartered Accountants of India (ICAI) has opposed the proposal, claiming that tax audits require specialised training that only CAs can provide. ICAI President Charanjot Singh Nanda has stated that CAs are especially qualified to tackle the complexity of tax law and financial reporting. Chartered Accountants play an important role in tax audits because of the specialised training they receive, according to Nanda in recent media interviews. He believes that tax audits should be handled by CAs, who have the technical skills needed to navigate the complexities of tax law and financial reporting.