sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« Direct Tax »
 Three reasons to file income tax returns on time
  New direct tax code may have to wait until 2019
 Direct tax collection grows fastest in 7 years in FY18, courtesy GST; here’s how indirect tax reform helps
 Income Tax: Deadline for filing belated ITR of Assessment Year 17-18 is over
 Income Tax department cautions TDS deductors, says file statements by May 31 or pay penalty
 ITR-4 launched on e-filing portal; total 3 ITRs available now
 CBDT directs income tax department to hold grievance redressal fortnight for taxpayers in June
 Income tax return form-2 in Java format released for e-filing for FY2017-18
 3 ITRs available now ITR-4 launched on e-filing portal
 Businesses, small taxpayers to gain from new direct tax code
 New direct tax code to benefit corporates, income tax payers

PM to review work on Direct Tax Code
December, 14th 2009

The finance ministry has scheduled a meeting with Prime Minister Manmohan Singh on January 5 to seek his guidance on the final draft of the Direct Tax Code that will be finalised by the end of December. His views on the Code will be reflected in the tax proposals of Budget 2010-11.

A senior revenue department official told The Indian Express, There are three issues on which a political call is required. These are: the exempt-exempt-tax regime for retirement savings, the 2 per cent minimum alternate tax on gross tax assets of companies and the proposal to tax charitable organisations at 15 per cent. Hectic lobbying by interest groups is still on for dilution or an altogether elimination of these proposals from the final draft.

The officials in the revenue department said finance minister Pranab Mukherjee is yet to make up his mind on these three issues. His views are expected over the next few days, the official said.

According to officials, the effectiveness of the Code would be in its implementation as a full package. If India Inc and people want lower taxes overall, they should be willing to live without exemptions. The Code cannot be implemented in a piecemeal fashion since any distortions would lead to a falling apart of the entire structure, an official, who did not wish to be quoted said.

The other option, the officials said, was to continue with the business-as-usual approach. We have been following a gradualist approach towards tax reforms over the last 10 years. The Code presents an opportunity to leap forward and clean up the regime, another official said.

Of the nine areas of concern raised by stakeholders where Mukherjee had promised a review, the department has received the Finance Ministers go-ahead on four. The proposals that will be retained as proposed in the Code are: elimination of difference between short term and long term capital gains; double taxation avoidance agreement, General Anti-Avoidance Rule and test of residency and treaty override.

The most vocal opposition to the DTC is from India Inc that wants the new proposal on MAT to go. At present, MAT is levied based on the book value method. But this is a key proposal. MAT on gross assets is expected to make good for the expected shortfall on account of the sharply lower overall tax rates, the official said. The ministrys grouse is though the statutory corporate tax rate is 33.99 per cent, companies pay only 22.24 per cent according to 2007-08 figures.

In Budget 2009-10, Mukherjee had highlighted that the revenue foregone due to corporate tax exemptions was Rs 68,914 crore in 2008-09 or 11.36 per cent of the total corporate tax collection. Though he reckons that exemptions are a bane, it will not be an easy call for the finance minister, the officials noted.

Similarly, the Codes proposal to bring all savings schemes under an EET regime has met with stiff opposition. But revenue department officials argue that it would discourage employees from withdrawing all their moneys at the time of retirement. They will be forced to invest in annuity schemes and this is particularly required in a country like ours where there is little or no social security mechanism and life expectancy will only increase in the coming years, an official said.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Web Application Development Web based Software Solution Web Application Deployment Web Application Solutions Web Application Software Development Web Application Deployment Web Application Programming Web Application Design and Development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions