The government has identified seven critical areas of concerns, including taxation of retirement benefits, in the draft Direct Taxes Code and proposals are just "illustrative" and open to discussions, Finance Minister Pranab Mukherjee has said.
There is no need to think that a decision has been taken as these proposals are only "illustrative" and open for discussions, Mukherjee said.
The government plans to implement the Code from 2011-12 after addressing all concerns relating to controversial proposals like taxation of retirement savings, weeding out incentives for housing loans and changes in the Minimum Alternate Tax (MAT).
Giving the roadmap for the Code that will replace the Income Tax Act of 1961, he said, "It will be implemented from 2011. So, the finance bill of 2011-12 would be appropriate."
The government would consider suggestions related to the seven identified critical areas of concern, before giving it the final form.
The critical areas of concern include shifting the base for computation of Minimum Alternate Tax (MAT) from book profits to assets, capital gains taxation in case of non-residents, double tax avoidance agreements, General Anti-Avoidance Rules (GAAR), taxation of foreign companies, taxation of charitable institutions, and shift to EET system for taxation of savings.