Why CS Should Be Accountants Under Income-Tax Bill 2025 – A Research

Summary: The recently introduced Income-Tax Bill 2025 simplifies the Indian tax framework but retains the exclusion of Company Secretaries (CS) from the definition of “Accountant” under Section 515(3)(b). This exclusion overlooks the evolving role of CS professionals in taxation and financial governance. With India facing a shortage of qualified tax auditors, incorporating CS as Accountants could address compliance delays, reduce costs, and enhance governance. CS professionals, equipped with a curriculum covering tax laws, corporate governance, and financial management, already contribute to tax compliance. Precedents such as the Direct Tax Code (2010, 2013) and recognition under earlier tax regulations further justify their inclusion. Global practices, including those of the USA, UK, and Australia, recognize multiple professionals in tax compliance, advocating a collaborative ecosystem. By integrating CS into the income-tax framework, India can reduce compliance costs for MSMEs, improve tax filing efficiency, and promote fair competition among financial professionals. This approach ensures a holistic tax compliance system while addressing the nation’s tax auditor shortage.

Introduction

The union government, recently presented its Income-Tax Bill 2025 to simply the Indian income-tax system. In the simplification steps, it has used many old rules as is; One of that was definition of Accountant, which was excluded the Company Secretaries (CS) from to perform the income-tax related audit and certification under Section 515(3)(b).

The Company Secretary (CS) profession has significantly evolved over the years, extending its expertise into various domains, including taxation, in alignment with business expectations. exclusion under the Income-Tax Bill 2025 overlooks the substantial contributions of CS professionals to tax compliance and financial governance. now, union government is conducting a study to determine whether CS should be considered as an Accountant.

Our research presents an unbiased, national-interest-focused analysis of why including CS in the definition of an Accountant will enhance India’s tax compliance framework, improve economic efficiency, and support overall professional development across multiple domains.

1. Strengthen our India’s Tax Compliance System

• Bridging the Gap in Tax Auditors: at present India faces a shortage of good qualified tax auditors, leading to delays and inefficiencies in tax compliance, expectation of extension of filing due dates. Giving level playing to CS for the definition of Accountants surely assist bridge the space and streamline tax processes. (Reference: 6.8 crore taxpayers depend upon 1.25 lakh full-time practicing CAs (ICAI Data, 2023), developed a bottleneck in tax compliance.
• Improves the General tax Governance: CS as a company key professional and governance manager, has already been focused on the corporate law, and supervise the entire compliance system, including taxation services, making them well-equipped to ensure financial transparency and compliance for all businesses.
• It Encourages Fair Competition in all Three Professionals: Inclusion of CS definitely create worldwide career hub in India, and it creates a multi-disciplinary tax compliance system where CAs, CMAs, and CSs work together, ensuring a robust financial ecosystem for upgrade of the India’s taxation system.
• It Reduces the Cost at the income-tax filings: A numerous experts base for tax audits will create less cost compliance tax filing services, benefits startups, MSMEs, and large corporations alike. (Reference: MSMEs make contribute 30% to India’s GDP however face excessive prices because of lack of affordable tax professionals (Ministry of MSME Report, 2023).

2. Recognized CS as an Accountant in Income-Tax Laws and Rules

A. (Old) Income Tax Act-1961

• In the Income-Tax Act-1961 (under Section 288(2)), It has recognized Company Secretaries as authorized representatives in income-tax matters, it demonstrated their competence in tax management and financial compliance.
• In the Rule 12A of the Income-Tax Rules,1962 permits Company Secretary to verify and certify tax returns, It reinforcing their role in financial as-well taxation matters.
• Under Income-tax Section 44AB and Rule 6G of the Income-Tax Rule recognized Accountants for audit certification purposes, a scope where Company Secretary should also be acknowledged.

B. Recognition as an Accountant in the Income-tax

• Below are the Accountancy Exams Recognized under Section 288(2) for the purpose of Accountant:
  • Final Examination conducted by the Institute of Company Secretaries of India (ICSI) is recognized for the purpose of accountancy qualification.
  • Government Diploma in Company Secretaryship awarded by the Department of Company Affairs is also acknowledged.
  • Final Examination of the Institute of Cost and Works Accountants of India (ICWAI) is included in the same category as Accountant.
• The above recognition for Commerce oriented examination, confirms that CS has the qualifications to meet the standards expected of an Accountant under income-tax laws.

3. CS Education Qualification, Training and Expertise

• ICSI syllabus: CS curriculum Includes the expert knowledge content on the income-tax modules, auditing, financial management, and corporate law, aligning with the core competencies of an Accountant.
• CS Practical Experience: CS during the course of education, undergo rigorous mandatory practical training in corporate finance, taxation, and governance, making them highly qualified for financial compliance roles.
• CS Specialized Knowledge: CS professionals are uniquely positioned to understand tax implications, interpretation of law of corporate transactions and business structures.

4. Addressing Potential Counter arguments

• Distinct Yet Collaborative: as per Ministry of Corporate Affiars, CA’s has been assigned for the role of statutory audits and financial reporting, CS professionals focus on corporate law, taxation, and compliance.
• Defined Scope of practice: CS professionals can be assigned specific income-tax functions such as tax return certifications, corporate tax planning, and GST compliance, complementing CAs and other professionals.
• Overlap with Other Professions: CS expertise is a complements rather than competes with CAs and CWAs, ensuring a stronger compliance system in India.

5. Precedents of earlier drafted Direct Tax Code (DTC) Recognition of CS as Accountant

A. Direct Tax Code (DTC) year 2010 & 2013

• Both versions of the DTC Bill included CS in the definition of Accountant, reinforcing their financial and tax expertise.
• Even tax bill Draft-2025, which was circulated before it passing in parliament was included the CS under the definition of Accountant.(ref: Tax-bill draft 2025)

6. Global Recognition of multiple Professions in Taxation Compliance

• USA (IRS Tax Practitioner Regulations): Recognizes multiple professionals, including tax attorneys and financial consultants, as accountants in taxation matters. (Reference: https://www.irs.gov/tax-professionals/enrolled-agents)
• UK (HMRC Tax Regulations): Acknowledges corporate compliance professionals for tax representation and accounting services.(Reference:https://www.gov.uk/government/organisations/hm-revenue-customs)
• Australia (Tax Practitioners Board Regulations): Expands the definition of tax compliance experts beyond Chartered Accountants. (Reference: https://www.tpb.gov.au/)

7. Our Conclusion on this.

The inclusion of CS as an Accountant under the Income-Tax Bill 2025 is not just a matter of professional equality but a significant step toward improving our country’s income-tax system. Recognizing CS certainly helps in:

• Strengthen the current tax compliance and governance.
• Reduce compliance costs for businesses sector.
• It Enhance competition and service quality.
• It Address the shortage of qualified tax auditors in India.

A Win-Win situation to all.

By integrating Company secretary professionals into the income-tax framework under the erstwhile definition of Accountant, our county will build a more inclusive, transparent, and efficient income-tax system, ultimately benefiting many businesses, taxpayers, and the economy as a whole.

 We have taken References:

1. Income Tax Act, 1961 – Section 288(2), Rule 12A, Section 44AB, Rule 6G.

2. Companies Act, 2013 – Section 205(1), Section 204.

3. CGST Rules, 2017 – Rule 83.

4. SEBI (LODR) Regulations, 2015 – Regulation 24A.

5. FEMA Regulations.

6. Direct Tax Code (DTC) 2010 & 2013.

7. Taxmann Commentary on Direct Taxes – Recognition of CS in Accountancy Examinations.

8 Global Tax Regulations (IRS, HMRC, Australia TPB).

9. Statistical reports on the shortage of tax professionals in India.