Latest Expert Exchange Queries
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) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: VAT RATES :: empanelment :: TDS :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: TAX RATES - GOODS TAXABLE @ 4% :: due date for vat payment :: ACCOUNTING STANDARD :: VAT Audit :: ACCOUNTING STANDARDS :: list of goods taxed at 4%
 
 
Direct Tax »
 No change in gold seizure norms in proposed I-T Law amendments
 Direct tax collection will get a long-term boost, Franklin Templeton says
 I-T Act amendments upset calculations of cash hoarders
 Claim tax benefit on costs incurred to evict tenants
 The Integrated Goods And Services Tax Act, 2016
 Here’s what Income Tax Department did leading up to demonetisation
 I-T department asks IDS declarants to pay tax by November 30
 Cash trove tax drive dilemma
  CBDT halves Income Tax refunds issue timeline to 15 days for this fiscal
 CBDT signs four unilateral advance pricing agreements
 Central Board of Direct Taxes allowed Rs 4,500 crore of irregular benefits to infrastructure companies: CAG

Taxmen feel that Direct Tax Code may lead to loss
September, 21st 2009

Critical of the proposed Direct Tax Code (DTC), senior Income Tax officials feared that it may result in an annual revenue loss of Rs 55,000-crore and that it was not revenue-neutral as made out to be.

"The tax revenue loss could be as high as around Rs 55,000-crore annually with estimated revenue loss in personal Income Tax (PIT) alone standing at around Rs 25,000-crore," senior Income Tax Officials including chief commissioner level officers told.

The officers, mostly based in Mumbai, wanted to remain anonymous, being serving Government officials.

Noting that the new tax code is heavily skewed against the salaried class, they said it attempts to reversed the concept of "pay-as-you-go (earn)" considered to be the rational tax policy all over the world.

Under the garb of providing long-term stability in the tax regime, the tax code in fact would widen the rich-poor gap and create more economic absurdities, the officials which included some commissioners as well, said.

"Take the case of individuals where extensive give-aways by widening the tax base took place. The DTC plans to recover them by taxing pensions, leave encashment, retrenchment, compensation, commuted pensions, VRS compensation, gratuity received on death and drawings from superannuation fund," officials said.

Besides, DTC also plans to recover these give-aways by taxing non-monetary benefits such as LTC, medical reimsbursements, house perquisites, etc, they say.

The direct tax code sought to remove the power of the Central board of direct taxes to issue notification and circulars or to bring amendments, they said, adding those who have drafted it have displayed "a sinister ulterior motive" rarely witnessed in mature democracies.

Also, the press reports that the CBDT has been kept away from this process of preparing the tax code itself showed the "perversity" of the authors.

"Such ill-baked work should not be thrust upon the unsuspecting public," they said.

The new source of tax revenue heavily relied on retirement benefits, termination and gratuity, whereas the other new revenue sources like LTC, medical reimbursements were periodical in nature, they said.

"In other words, new tax sources affect only those minor portion of the vast employee tax base like retirees, persons who availed LTC, medical benefits, etc., whereas the give-aways are to the entire tax-payer population," officials say.

"Taking into account all these factors, it is no brainer to see that we are heading for a steep fall in revenue in FY 11-12, when the proposed DTC comes into effect," the officials said.

With an estimated tax loss of Rs 55,000-crore, the DTC is a disaster and that is precisely the reason why no estimates of the tax losses are provided in the Code, the officials said.

"As per the economic survey 2009, 60 per cent of India's population do not have income of (even) Rs 20 per day. In such a grave situation with about 660-million mouths to feed, why should the Government forego Rs 1.2-lakh as tax from a person earning Rs 10-lakh income," the officials said.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Quality Assurance Services Testing and Re-testing

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