S Mahalingam, CFO and ED, Tata Consultancy Services, says the new direct tax code still needs to clear the air on exemption of software technology parks and on minimum alternate tax. "The IT industry still seeks clarifications."
Q: What are the issues that the new code has raised?
A: When you look at any of these things there are going to be issues. For instance, if you could just take two or three areas, one is this whole area of exemptions on which many of us have taken decisions over a longer period in terms of bringing in new facilities and so on.
So, what happens to existing is a very important one. At this moment, anything that takes place after April 1, 2011 doesnt seem to be covered and this is something we need to take up because decisions have been taken much earlier and so on.
As soon as the draft direct tax code came along, we thought the whole thing is drafted. But then of course we noticed the grandfathering clause and so on. The other one is in terms of MAT calculations itself, but that may not have an effect as far as the industry is concerned.
But issues in terms of what happens to MAT tax and period over which it was to be set off. These are issues which will definitely get discussed. From a code perspective, simplification is always welcome. In terms of making life easier in terms of reducing tax rates that you can plan for, they have done very good.