Finance Minister Pranab Mukherjee Friday said a new direct tax regime with rationalised rates and simplified procedures will take effect 2011, even as the government was open to suggestions from all stakehopders to fine tune the proposals.
We want to present all stakeholders with a tax regime that is simple and broad based, leading to lowering of tax rates, much better tax compliance and reduced litigation, Mukherjee told a seminar on the new Direct Tax Code here.
He also said the government has identified seven critical areas on the Direct Taxes Code for further detailed examination and interactions with all stakeholders. These are:
-The concept of minimum alternative tax based on gross assets
-Capital gains tax in the case of non-residents
-Income Tax Act and double taxation avoidance pacts with other nations
-Rules that seeks to curb aggressive tax avoidance
-Taxation of foreign companies in India
-Taxation of charitable organisations
-Tax on maturity amount of investments where interest is tax-exempt
Mukherjee said it has the governments endeavour to incorporate best practices prevailing across the globe and to use innovative methods for attaining equity while framing the new direct tax regime.
The new system will also take into account established and time tested practices which have withstood judicial scrutiny, the finance minister added.