Finally, the much talked about Direct Tax Code Bill is introduced in the parliament but with a trimmed down version of the original draft.
The original draft was much more dynamic and laid down certain provision which could have altered the very nature of Direct Taxation System in India but our very own set of ministers feel that such drastic measures at one go might not be right for the government and thus this cautious approach which is quite visible in the final submitted draft.
Highlights of DTC:
- The salaried class was waiting for a much larger tax relief which was promised in the original draft but what they got is really peanuts.
- Upto 5 lacs – 10% 5 lacs to 10 lacs – 20% Over 10 lacs – 30%
- Tax deductions for Principal on Home Loan is removed.
- Savings of 1.5 lacs to be tax free.
- LTA Benefits to be taxable.
- No special concessions for women.
- Corporate Tax on companies reduced to 30%.
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Well really an interesting article, Well I want to know, why there is no concession for women this time, if you see in large corporates women percentage is more as compared to males. This is really not fair by the government of india, we should raise an objection.
In the recent press conference, the Revenue Secretary while answering to the Media has said that the reason for delaying the Direct Tax Code is not that the Govt. is not prepared but its only that they want the Industry to be well prepared in Advance before bringing any major changes and infact this is the mechanism which is adopted all accross the Globe
You are right Karan but the way and the magnitude in which the DTC is being implemented from the manner in which it was projected earlier with tax reforms which will change the face of the nation is completely missing in this trimmed down version of DTC.
I am sure your would agree with point, the timeline to implement from 1st April 2012 is correct so that laywers, CA's and other institutes get to know about this in detail before implementing it.