Direct taxes code to be released today

Corporate Laws and Indirect Taxation Laws Practitioner.

 The government will release the draft of the direct taxes code on Wednesday that seeks to simplify the taxation rules for public comments, finance minister Pranab Mukherjee said on Tuesday.

“The best practices in the world have been studied and incorporated. Tax policies that would promote growth with equity have been reflected in the new provisions,” Mukherjee said at a conference of the income tax chief commissioners and director generals. He said the government would introduce the Direct Taxes Code Bill in Parliament during the Winter Session. Net direct tax collections grew at 3.27% to Rs 73,990 crore in April-July 2009 from Rs 71,648 crore in the same period last fiscal. Mukherjee urged the tax officers to raise the collection target for 2009-10 by Rs 30,000 crore to Rs 4 lakh crore.

Pitching for a simple, stable and robust tax structure, Mukherjee said, “Tax rates should remain moderate and multiplicity of taxes, tax exemptions and deductions should be gradually phased out to improve tax compliance.”

Corporate Laws and Indirect Taxation Laws Practitioner.

 Country’s direct tax laws are all set to become ‘saral’ for taxpayers. The government would on Wednesday unveil the new Direct Tax Code that seeks to simplify and rationalise the tax provisions. Finance minister Pranab Mukherjee will release a draft of the code and a discussion paper in the presence of home minister and former finance minister P Chidambaram, who initiated work on it during his tenure. The new code that aims to change the face of how direct taxes in the country will replace the current Income-tax Act that was enacted about 50 years ago in 1961. It would provide for tax calculators—allowing taxpayers to calculate their own taxes, explain a tax provision in simple language. One such case is to do with charities, which have in the past run into litigations because of the various interpretations of the rules. It could attempt to rationalise tax rules for charities that allow exemptions under a slew of provisions in the Income Tax Act. Experts say the new code is likely to simplify the rules so that they become transparent and easily understood by both the tax collector and the tax payer in this category. The proposed tax code is also expected to include new measures to prevent abuse of some special bilateral taxation treaties between India and some nations. The double taxation avoidance treaty, as it is known in technical parlance, allows taxpayers to pay a tax on their income only in one of the two countries which have signed the agreement.




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