Sep 18, 2010

Revised Discussion Paper on Direct Taxes Code

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Revised Discussion Paper on Direct Taxes Code

The Government of India (GOI) had released a draft Direct Taxes Code (DTC) along with a Discussion Paper in August 2009 for public comments. Since then, a number of inputs on various proposals have been received across different forums. These inputs have been examined and major issues on which various stakeholders have given their views have been identified. The GOI, yesterday i.e. on 15 June 2010, has released a Revised Discussion Paper (RDP) to address 11 such issues.

The RDP further states that there are a number of other issues which have been raised in the public feedback, which though not part of this Discussion Paper, will be considered while finalising the Bill for introduction in Parliament.

The 11 issues addressed in the RDP are:

  • Minimum Alternate Tax (MAT)
  • Tax treatment of savings
  • Taxation of income from employment, retirement benefits and perquisites
  • Taxation of income from house property
  • Taxation of capital gains
  • Taxation of non-profit organizations
  • Special Economic Zones – taxation of existing units
  • Concept of residence for companies incorporated outside India
  • Double Taxation Avoidance Agreement vis-a-vis domestic law
  • Wealth Tax
  • General Anti Avoidance Rule (GAAR)

It is apprehended that the proposals in this Revised Discussion Paper would lead to a reduction in the tax base as was initially proposed in the DTC and thus the indicative tax slabs and tax rates and monetary limits for exemptions and deductions proposed in the initial DTC will therefore be calibrated accordingly while finalising the legislation. The GOI has indicated that responses to the RDP are invited up to 30 June 2010.

To download the Revised Discussion Paper on Direct Taxes Code, click here

For a comparison of existing Tax Provisions of Income Tax Act,1961, Direct Tax Code, 2009 and those related to this revised discussion paper,2010 click here

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