Finance Minister, Shri Pranab Mukherjee said, Updates: Revised Direct Tax Code (DTC) June 2010
I propose to pursue structural changes in direct taxes by releasing the new Direct Taxes Code within the next 45 days and in indirect taxes by accelerating the process for the smooth introduction of the Goods and Services Tax (GST) with effect from 1st April, 2010. The Direct Taxes Code, along with a Discussion Paper, will be released to the public for debate. Based on the inputs received, the Government will finalise the Direct Taxes Code Bill for introduction in this House sometime during the Winter Session”
The Government will consider inputs and suggestions received from the public before finalising the Direct Taxes Code Bill for introduction in Parliament sometime during the Winter Session.
The current Income-tax Act was enacted in 1961 to replace the earlier Act which had been legislated before Independence in 1922. More than 50 years have elapsed since the introduction of the current Income-tax Act. The Government had, therefore, announced its intention to introduce a revised and simplified Income-tax Bill while presenting the Union Budget for 2005-06.
Subsequently, work was undertaken on drafting a Direct Taxes Code to replace the current Income-tax Act, 1961 and the Wealth-tax Act, 1957. In his speech in Parliament on 6th July, 2009, while presenting the Union Budget for 2009-10,
Former finance minister and now the home minister, P Chidambaram, who had initiated work on the proposed code during his tenure, said the direct tax code was outdated and it needed a revamp.
The direct tax code would replace the Income Tax Act 1961, Chidambaram said. Adding that the new direct tax code would become a law only by 2011, Chidambaram said the new tax code would be a vast improvement over I-T Act 1961.
Finance Minister Pranab Mukherjee said tax reform is a process, not an event. To moderate tax rate and simplify tax laws , all direct taxes including FBT and income tax would be brought under one code, he said.
The new code is aimed at eliminating the scope of litigation as far as possible, Mukherjee said, adding that the government will have informed discussion with stakeholders on the tax code.
Finally The finance ministry on Wednesday (Today) released the draft of direct tax code that seeks to simplify the current tax provisions.
The direct tax code would replace the Income Tax Act 1961, Chidambaram said. Adding that the new direct tax code would become a law only by 2011, Chidambaram said the new tax code would be a vast improvement over I-T Act 1961.
Finance Minister Pranab Mukherjee said tax reform is a process, not an event. To moderate tax rate and simplify tax laws, all direct taxes including FBT and income tax would be brought under one code, he said. The new code is aimed at eliminating the scope of litigation as far as possible, Mukherjee said, adding that the government will have informed discussion with stakeholders on the tax code.
Download Direct Tax Code Bill 2009
Related posts:
- Download Direct Tax Code Bill 2009
- Direct Tax Code 2011 Cleared by Cabinet
- Revised Discussion Paper on the Direct Taxes Code Now Released June 2010
- New Income Tax Slab under New Direct Tax Code 2009
- Direct Tax Code : Tax on Saving Withdrawals : EEE would be EET.
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{ 16 comments… read them below or add one }
abolish all the useless deductions like sec 10(A), 10 (B) etc and make one deduction for one type of persons from his total income e.g. one deduction for businessmen which is avilable only for businessmen not for others and other one avilable for individual etc.
This is the most needed action taken by Honorable Finance minister. The Income Tax Act is prepared in 1961 needs the change. The new Direct Tax Code should be simple and easy.
Thanks to Finance Minister.
yes i m really happily surprised that our ministers are working on the right track.
in brief it would be very beneficial to our medium class of people.
hope for the best.
Regards,
B.Nath.
But what happens to the IT professionals who have invested their savings in Housing Loans, if the govt is removing tax eligible for the huge amt of interest being paid by people to banks? If govt is changing policies like this of removing the entire house loan interest, then most of the IT employees will not buy housing loans which will bring down the real-estate market.
Income tax slab looks ok, but what abount, the Housing loan Intrest? Is it still under under deduction. This must continue because lot of peaople took loans for housing considering deductions. If not then it will be disappointement to all salaried people and also will impact on Realestate and housing sector.
Request to take care.
The minister for finance should definetly not scrap the deduction availed by people u/s 24(b) for home loans since that is a attraction for people to buy homes on loans and thus it keeps the banks revenues from interest up. Also a elimination of such deduction will discourage people from purchasing new homes which will hit the already affected real estate sectors rivival. On the contarary the finance minister should increase the limit for interest deduction from 150000 to around 250000 or 3lacs.
The concerns of voluntary sector which works hand in hand with Govt. for the development of the nation have completely been neglected in the proposed DDTCB. It is our humble request to modify those provisions so that the voluntary sector can do great things to the nation.
In the new Tax regimen T.D.S. on Interest on Fixed Deposit in Bank should be deducted at the time of Maturity/Payment. Present system of TDS on Accrued interest is wasteful and for Tax payee very confusing to compute interest.
“The Housing Loan” side, will surely have to considered as most of the salaried class in India have availed housing loan, as it would save a considerable amount of tax. When the real estate market is trying hard to come up, any decision which removes the tax benefits got from Housing loans, will have a huge impact on the Real Estate sector across India. And, this is really an extra burden on the salaried class.
When there are so many small shops, agents, real estate brokers, micro businesses etc. where there is huge amount of earnings ‘not’ accounted for, something has to be done to ensure that tax is collected genuinely from these areas.
Please don’t burden the salaried class of people at this time, as they are the ones who ( with their buying capacity) will play a pivotal role to help the economic revival which is in its incessant stage.
Finance minister should consider having separate tax structure for aged more than 60 and getting pension. Nowadays old age homes are growing due to non-interest or inability of youngsters to take care of their parents . some parents are left in the street. In order to reduce this impace and social soft fabric, it is suggested that Pranab mukerjee should give tax benefits to those earning persons who contribute pension plans of their parents upto Rs.50000 per year. This will go to the benefit of elders during their life time and then corpus will go to the employee who contributed.
In another mode, the govt should frame some annuity schemes or approve some annuity schemes for elders and earning member of the elders are encouraged to contribute to this for certain no. of years so that aged parents can survive without family bickering and break.
what about those employees working like doctors on contract basis etc. whose salary is given after deducting hefty TDS. Is there a provision that TDS had been reduced or these people also come under the bracket of deductions upto 3 lacs.
there has to be some interest free deduction for savings. As my first preference will be to save my money for a 3 lac saving because it is very difficult to get refund from IT department, as a result i will not able to spend much as compared to now and the impact will be low demand for industrial products. and afterall interest on tax savings are going to be taxable.
FM has to revise the DTC 2011 once again after its implementation.
Whatever policy changes are under consideration should be with prospective effect and not retrospectively else the ones who had their long term plannings done will be of no use and they will need to reconsider their investments again. For eg. in case of insurance proceeds on maturity of the policy should not be made taxable if the policy was entered into before the law coming into force. Due consideration should be given to the people who have such investments else whole purpose of the investment gets defeated.
Taxning withdrawals from PPF is a cruel joke and breach of trust of nation.
At best the old subscribers should not be taxed. The new entrants are free to choose the entry to PPF. When PPF matures, the subscribers have little life span left to amend the losses.
Taxing withdrawals from PPF is a cruel joke and breach of trust to nation. By the time PPF matures, the subscribers have little life span left to mend the loss. At best, the law should be made applicable to new entrants. They are free to choose their options.
ppf and lic should be exempt at time of maturity due date