The finance ministry will publish a revised draft Direct Tax Code (DTC) by early-June to invite public comments.
The new code advocates that long-term savings be taxed during withdrawal and the minimum alternate tax (MAT) be computed against the gross assets of the companies concerned. Industry bodies and public reacted strongly against the proposals.
Union revenue secretary Sunil Mitra on Monday said the government will invite suggestions for 15 days on the DTC and will prepare the final draft of the new tax legislation.
By budget session, it should be law, Mr Mitra said at an interactive session organised by the Bengal National Chamber of Commerce & Industry.
The new tax code aims to simplify the income tax structure and will replace the existing Income-Tax Act. The Code will minimise exemptions, the revenue secretary said.
The government plans to introduce the code in Parliament during the monsoon session, which normally starts on July 15 every year. The government had come out with the first draft on the code in August last year.
On the proposed goods and service tax (GST) regime from April 2011, Mr Mitra said the Centre will compensate fully if states suffer a loss during the transitional period. This means, the government may overshoot the Rs 50,000 crore compensation package suggested by the 13th Finance Commissions recommendation.