Calculating and paying taxes might soon become a jargon-free and less cumbersome exercise, with the UPA government planning to introduce a new income tax code.
The government is giving final touches to a discussion paper on the code, which would be released for public debate on August 20, after which a Direct Taxes Code Bill will be introduced in Parliament in the Winter Session.
The new direct tax code will be released along with the discussion paper by August 20, minister of state for finance SS Palanimanickam told Lok Sabha in a written reply last week.
The code envisions easing the tax rules for taxpayers and professionals to understand and compute effective taxes.
Once introduced, the new code will replace nearly five-decade-old Income Tax Act, 1961. A few other legislations, including the Wealth Tax Act, will be subsumed under it.
Interpreting the voluminous Income Tax Act, 1961 that has gone through several amendments has never been easy for the common taxpayer, who is often forced to take the help of chartered accountants.
The new code will simplify matters, with emphasis on making the rules short, light and easy to understand, and removing redundant provisions and complex terminology.
It will be equipped with tax calculators and simple formulae for calculating taxes, doing away with the need to refer to voluminous explanations for every clause and sub-clause for computing effective taxes.
While presenting the Union Budget for 2009-10, finance minister Pranab Mukherjee had said that the government would bring the new DTC within 45 days. August 20 is the last date, by that statement.