Income Tax : As per news report, out of 190 recommendations made by Committee, the Finance Minister accepted 153 either wholly or with partial ...
Income Tax : Tax Audit under the Income Tax Act is currently allowed to be conducted only by the Chartered Accountant but Proposed Direct Tax C...
Income Tax : The initiation of enactment of the DTC Bill was, if one remembers right,lately announced to be slated to be made on 22nd August (?...
Income Tax : 10. Threshold limit for TDS: The present section 194J provides an exemption limit or threshold limit for TDS for professional fees...
Income Tax : As we are expecting the DTC be implemented from 1st April 2012, we have to be familiar with the DTC provisions. In general the DTC...
Income Tax : Direct Taxes Code, 2013 has proposed to widen the scope of the definition Accountant” to include other professionals as well. It...
Income Tax : The Finance Minister Shri P.Chidambaram has said that the work on Direct Taxes Code (DTC) is in progress. Presenting the Union Bud...
Income Tax : On the changes suggested by the panel in the DTC, Mukherjee said two recommendations, General Anti Avoidance Rule (GAAR) and Advan...
Income Tax : The Union Finance Minister ShriPranab Mukherjee today expressed firm commitment to enact the Direct Taxes Code (DTC) Bill at the e...
Income Tax : The committee, according to sources, wants the government to raise the income tax exemption limit to Rs 3 lakh in view of the near...
Finance Minister Pranab Mukherjee today rejected criticism of the revised draft Direct Taxes Code over the proposal to restore exemptions in income tax, saying the tax rates are indicative and not final. Changes (made in the revised draft Code) cannot be presumed as “progressive or regressive”, he told PTI in an interview making it clear that final tax rates are the prerogative of Parliament to decide.
Draft Provisions of DTC: DTC proposed to do away with the exemption available in respect of Leave encashment received at the time of retirement (presently Rs 3 lakh in specified cases and fully exempt in case of government employees).
The New Pension Scheme (NPS) for the unorganised sector got a much-needed fillip with the revised discussion paper on the Direct Taxes Code proposing that the end proceeds under this scheme be exempt from tax. Under the existing tax structure, the maturity proceeds under the NPS are taxed. That is, an EET (exempt-exempt-tax) method is followed. This put the scheme at a disadvantage vis-a-vis other savings instruments where the exempt-exempt-exempt (EEE) method was followed.
The introduction of the Direct Taxes Code (DTC), which will replace the 50-year-old Income Tax Act, will make Foreign Institutional Investors (FIIs) liable to pay capital gains tax on their income from securities trade. All the FIIs will be subject to the capital gains tax after implementation of the Direct Taxes Code.
The revised DTC proposed to continue with the exempt-exempt-exempt (EEE) regime for Government Provident Fund (GPF), Public Provident Fund (PPF) and Recognised Provident Funds (RPFs) and the pension scheme administered by the Pension Fund Regulatory and Development Authority. In addition, approved pure life insurance products and annuity schemes would also get the same tax treatment.
Revised discussion paper on direct taxes code clarified that the domestic code would not override the double taxation avoidance agreements.This could come as a huge relief as majority of the FIIs operating in India are registered in tax havens. The discussion paper also removed the ambiguity on income classification for tax computation.
Tax treatment of savings:-The DTC has proposed contributions up to Rs 3 lakh in a year (both by employer and employee) to any account maintained by a permitted savings intermediary be exempt from tax, and would remain untaxed if it remained in that account. Withdrawals are to be included in income from residuary sources, and taxed accordingly.
Currently Ulips come under the EEE (exempt exempt exempt) regime when it comes to taxation. What this means is that the money invested in an Ulip is tax exempt, the returns earned during the tenure of the Ulip are tax exempt and the amount received at maturity is also tax exempt.
The revised discussion paper on DTC, released on 15.05.2010, has addressed the concerns on all the nine areas that were brought to the notice of the Finance Minister. It has sought to restore the computation of minimum alternate tax (MAT) on book profit basis.
The government on Tuesday proposed to retain the income tax exemption for up to Rs 1.5 lakh paid as interest on housing loans in a year, a step that brings cheers back to home loan borrowers. The revised discussion paper on Direct Taxes Code (DTC), which would replace the decades old Income Tax Act, has retained the tax exemption for up to Rs 1.5 lakh paid as interest on housing loans. The revised draft is put up for public comments till June 30.
