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Salutary changes in Direct Taxes Code
March, 14th 2011

The Direct Taxes Code (DTC), which is now before Parliament, is expected to bring about many salutary changes in direct taxes. For instance, it will consolidate and integrate all direct tax laws and simplify the tax provisions by using simple language.

Most important for income taxpayers, the DTC will seek to moderate taxes further and simultaneously reduce exemptions and deductions to the barest minimum and introduce stability in the direct tax rates by proposing the rates of taxes in a separate schedule.

The DTC will widen the tax base and replace profit-linked deductions with investment-linked deductions for priority areas.

The legislation is proposed to be effective from April 1, 2012, to help taxpayers, tax practitioners and tax administrators to adjust to the new provisions and procedures.

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