The Direct Taxes Code 2009 is now on the back burner. The Union finance ministry has veered round to the view that its bold move to reform direct taxes should be subjected to further scrutiny. Contrary to earlier expectations, therefore, the Direct Taxes Code 2009 will not be presented to Parliament as a Bill along with the Union Budget for 20010-11on February 26.
The draft direct tax code that will lead to overhaul of the Income Tax Act, has created uncertainty among the developers and units in the special economic zones over continuation of the tax sops.
The government on Monday promised to come out with a framework for the Direct Taxes Code that will simplify tax structure within 45 days.
The government will introduce the Direct Taxes Code by April 2011 after examining thoroughly seven proposals such as taxing savings schemes and clamping the Minimum Alternate Tax (MAT) on gross assets that have not found favour with the industry, trade and people at large.
Finance Minister P Chidambaram on Monday said he is reviewing the Direct Taxes Code (DTC) Bill and it will be introduced in Parliament after taking into account the recommendations of the Parliamentary panel.
The Direct Taxes Code is being mooted as a replacement to the Income Tax Act 1961. What is the idea behind replacing something that has been around for close to 50 years and what is the strategy behind the exercise?
A senior official in the finance ministry said the Central Board of Direct Taxes addressed the nine areas of concern in the Code identified by Finance Minister Pranab Mukherjee.
"We are trying to bring the new taxation regime, which can last for another 50 years. Therefore, our endeavour is to see that new taxation system should include the basic features and time tested procedures of existing act, which have survived judicial security over the years."
The Direct Taxes Code Bill, introduced in Parliament on August 30 last year, proposes to replace the 50-year-old Income Tax Act.
The 48-year-old Indian Income Tax Act is set to be replaced by a new Direct Tax Code from April 1, 2011.
The biggest impact of the new tax system is the significant widening of income slabs. According to this, people with annual income not exceeding 1.6 lakh (Rs 160,000) will not have to pay any tax.
EEE continues for PF, life insurance and NPS; capital gains from stocks, equity funds may become a part of ordinary income.
The delegation, comprising leader of Opposition in Lok Sabha Sushma Swaraj, her counterpart in Rajya Sabha Arun Jaitley and others, said Mukherjee had assured them that DTC was only at the drafting stage and discussions were still on.
The Direct Taxes Code suffers from serious weaknesses.
The new Direct Taxes Code has been put in the public domain and will most likely be up for debate in the monsoon session of Parliament.
The government hopes to implement direct tax code from April 2011.
The Direct Tax Code recently been proposed by the Government of India, will bring about a change in the whole taxation system of the country. But how will it impact tax savers?
Financial and tax expert Anil Rego of Right Horizons has his doubts.
The Direct Taxes Code is likely to be implemented from 2011-12. Sources said the bill in this respect may be tabled in Parliament in the Budget session.
But, govt plans to bring some provisions that can't wait.
The proposed move to withdraw the DDT would help encourage investments by addressing multiple taxation of income and bringing down the effective tax rate on companies, which is among the highest in the world.
Tax practitioners said that the move will help salaried individuals meet the cost of some of the surgeries since the present limit was low and was mostly used up by consultation fees and cost of medicines.
While presenting the Union Budget for 2009-10, finance minister Pranab Mukherjee had said that in order to bring in tax reforms in the country the government will bring the new DTC within 45 days. The code will replace the existing Income Tax Act, which was enacted in 1961 and would subsume the direct tax legislations.
The government on Monday tabled the much-awaited Direct Taxes Code Bill in the Lok Sabha which proposed to raise the exemption limit on income tax from the current Rs 1,60,000 to Rs 200,000.
Direct Taxes Code will make politically difficult changes feasible
The proposal to levy a minimum tax based on assets undoes most of the good that the code seeks to do and will discourage capital-intensive industries.
Finance Minister Pranab Mukherjee has also said that the bill on DTC was likely to be tabled in the monsoon session of Parliament.
Finance Minister Pranab Mukherjee on Wednesday said the proposed Direct Taxes Code would give an edge to the country while dealing with international taxation issues.
The long awaited direct tax code bill (DTC) proposes to simplify Indian taxation system. Here's how it will affect and benefit the salaried class.
Sheilu Sreenivasan, founder president, Dignity Foundation, an NGO that works for the cause and care of the elderly, said "Our biggest worry is not what the government is going to give to senior citizens, but what it is going to take away from them."
A good tax system should minimise the cost of collection, compliance cost and the cost to the economy in terms of the distortions it creates while generating revenues.
What does the proposed Direct Taxes Code hold for the common man? A look at visible effects and implications of the proposals on our monies.
Finance minister Pranab Mukherjee said he was confident of the DTC being recommended by the standing committee in the coming (winter) Parliament session.
The Budget emerges as a measured, credible and forward-looking policy document that reinforces India's commitment to remaining a stable, reform-oriented economy amid an increasingly fragmented global landscape, says A Balasubramanian.
The forthcoming Budget is expected to bring about some of the changes for a smoother transition to the new tax code. Read on. . .
Taxmen are opposing proposals to cut personal income and corporate tax and scrap taxes on various transactions.
The new Direct Tax Code is expected to result in a higher tax-to-GDP ratio, reduce compliance costs, lower the administrative burden, discourage corruption and most importantly, improve equity both horizontal and vertical.
The draft Direct Taxes Code unveiled by Finance Minister Pranab Mukherjee on Wednesday proposes raising the tax exemption limit on savings to Rs 3 lakh.
The proposed Direct Tax Code Bill is likely to be a legislation by the monsoon session of the Parliament, 2010, a senior government official said.
Redrafting the Direct Taxes Code is proving to be an uphill task for the finance ministry, bombarded with comments from various stakeholders. The Central Board of Direct Taxes has received about 10,000 suggestions on the code, which seeks to replace the Income Tax Act of 1961.
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