Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
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
Popular Search: articles on VAT and GST in India :: VAT RATES :: Central Excise rule to resale the machines to a new company :: TDS :: ACCOUNTING STANDARD :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: form 3cd :: list of goods taxed at 4% :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS
Direct Tax »
 Advance tax calculation: Firms may have to furnish Apr-Sept income estimates
 Companies may have to furnish Apr-Sept income estimates to I-T dept
 CBDT working on a draft rule that makes it compulsory for companies to provide income estimates by Nov 15
 Companies, HNIs may soon have to specify reason for paying less advance tax than previous year
 TDS Applicability On Government Contracts Under Gst (Under Section 51 Of The Cgst Act, 2017)
 CBEC tells field officers to take GST disputes to Supreme Court
 Jurisdiction-free income-tax assessment on the cards
 CBDT asks I-T department to take urgent steps
 TDS on interest on deposits made under the Capital Gains Accounts Scheme, 1988 where the depositor has deceased
 Tax evaders set to face action: CBDT chairman Sushil Chandra
 Income-tax department calls big corporate entities to pay advance taxes

Tax code change to hit payees
July, 12th 2010

DTC likely to apply highest rate at a much lower slab than the proposed Rs 25 lakh.

The changes to the original draft of the Direct Taxes Code (DTC) are going to cost taxpayers, with the government planning to significantly alter the slabs.

While the slabs are yet to be reworked, officials indicated the highest one could be in the range of Rs 10-15 lakh, instead of the Rs 25 lakh proposed when the first draft was released last August.

Finance ministry officials said none of the changes proposed in the second discussion paper on DTC would lead to increased revenue for the government. If it sticks to the slabs proposed in DTC, its revenue collections, which showed an annual growth of 24 per cent in last five years, would be badly hit. The government is planning to implement DTC from next April, so the new slabs will affect the tax rates next year onwards.

The highest slab should be around Rs 10-15 lakh It will not be possible for the revenue department to give all those exemptions and still keep the slabs high. The slabs suggested in DTC-1 are exorbitantly high, considering most revenue-generating proposals in the original draft have been changed in DTC-2, an official in the finance ministry told Business Standard on condition of anonymity.

The official added that the rates 10 per cent, 20 per cent and 30 per cent will be retained but a final decision on the slabs would be taken after assessing the revenue impact of all other proposals in the DTC.

Per capita income of India, the average amount each person earns in the country, is Rs 44,345 or Rs 3,695 a month. If the government fixed the highest bracket at Rs 25 lakh, out of 35 million taxpayers, only those earning more than Rs 2 lakh a month were required to pay tax at 30 per cent.

Experts said the slabs would be lowered from the levels suggested originally, but not substantially. It is expected that the liberal rates proposed in the first draft of DTC will not remain so liberal in the Bill that goes to Parliament. I guess the highest slab will be in the range of Rs 15-20 lakh, said Sonu Iyer, partner at consulting firm Ernst & Young.

Nikhil Bhatia, executive director, PricewaterhouseCoopers, said there was a possibility that the highest slab might be brought down to Rs 20 lakh and above. But I think it would be better to take away all exemptions and deductions and leave the slab at Rs 25 lakh, he added.

In the second discussion paper, the government has decided to retain the exempt-exempt-tax (EET) method of taxation, which would have made individuals pay tax on savings instruments at the stage of withdrawal.

While the rates of taxation have not changed in the last 14 years, income tax slabs have been widened from Rs 40,000-Rs 1.5 lakh in 1997 to Rs 1.6 lakh to Rs 8 lakh today an increase of over five times in the highest slab. After widening the slabs in the first Budget of UPA-II in July 2009, Finance Minister Pranab Mukherjee surprised everyone by setting the highest slab at Rs 8 lakh. This is estimated to result in a revenue loss of Rs 26,000 crore in 2010-11.

The move was seen as a step towards introduction of the high slabs proposed in DTC. The revised discussion paper on DTC is silent on tax slabs. It said the indicative tax slabs and tax rates proposed in DTC would be calibrated. The finance minister has said rates would be part of the DTC legislation slated to be introduced in the coming session of Parliament.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

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