Begin typing your search above and press return to search.

New tax code for Parliament nod in monsoon session

By The Assam Tribune - 15 Sep 2010 12:00 AM GMT

New Delhi, June 9 (IANS): A simplified Direct Tax Code to replace the 50-year-old Income Tax Act and free people from the clutches of chartered accountants would be tabled for Parliament's approval in the monsoon session, Finance Minister Pranab Mukherjee said on Wednesday.

"The draft is under revision, taking into consideration the areas of concern expressed by various stakeholders," Mukherjee told the annual conference of Chief Commissioners and Directors General of Income Tax here. "The discussion paper will be shortly in the public domain before introduction in parliament in the forthcoming monsoon session. It will indeed be legislation for the 21st century, which will witness the emergence of an economically strong and vibrant India."

The minister said direct taxes were now a major resource provider to the government and had grown at an average rate of 24 percent per annum in the past five years, trebling from Rs 132,771 crore in 2004-05 to about Rs 378,000 crore in the previous fiscal.

The share of such taxes has also increased from 4.1 percent to 6.1 percent of the gross domestic product (GDP), which was made possible by rationalisation of tax structure and improvement in administration that led to better tax compliance.

"To improve compliance further, tax laws need to be simple, stable and robust. Tax rates should remain moderate. Multiplicity of tax exemptions and deductions must be gradually phased out in order to widen and deepen the tax base."

The Finance Minister also announced that in order to upgrade the skills of the Indian Revenue Service (IRS) officers, an advanced mid-career training programme for them would be started during the current year. This, he said, will equip officers to face challenges dealing with complex international transactions and fight menace of tax avoidance schemes and the use of tax havens and low tax jurisdiction.

Mukherjee also expressed concern over rising litigation with taxpayers and the quantum of revenue locked in appeals. He said taxpayers should be encouraged to mutual agreement procedure, which has emerged as a preferred alternate dispute resolution mechanism.

He asked the officers of the Central Board of Direct Taxes (CBDT) to come out with a comprehensive proposal to address the issue of unwanted litigation with taxpayers and also to realise locked up revenue in appeals.