Union Cabinet approved Direct Tax Code (DTC)

Direct Tax Code gets nod



Paving the way for radical reform and simplification in the Direct Tax system the Union Cabinet on Thursday approved the much-talked about Direct Tax Code (DTC) Bill proposing to provide more Income Tax relief to salaried class.



The DTC Bill, which seeks to replace the archaic Income Tax Act, 1961, proposes to raise the Income Tax exemption limit from existing Rs 1.6 lakh to Rs Two lakh, highly placed sources said. The Income Tax exemption limit for senior citizens is proposed to be raised to Rs 2.5 lakh.



Under the moderate tax slab suggested in the DTC Bill the government proposes tax rate of

10 per cent for income between Rs 2 lakh and Rs 5 lakh,

20 per cent for income between Rs 5 lakh -

Rs 10 lakh and 30 per cent for income over Rs 10 lakh.

Currently the Income Tax rate is 10 per cent on income above Rs 1.6 lakh and upto Rs 5 lakh, 20 per cent on income above Rs 5 lakh and upto Rs 8 lakh and 30 per cent on income above Rs 8 lakh.



The first draft of the DTC bill had suggested

10 per cent tax on income between Rs 1.60 lakh and Rs 10 lakh,

20 per cent on income between Rs 10 and Rs 25 lakh and

30 per cent beyond that.



The DTC Bill proposes to levy Corporate Tax at 30 per cent and there will be no cess and surcharge on it, sources said. The DTC Bill will be introduced in the ongoing Monsoon session of Parliament.



The Cabinet at its hour-long meeting chaired by the Prime Minister discussed at length various provisions of the DTC Bill, which will seek to bring about radical reforms and simplification in direct tax structure including the Income Tax rates and exemptions.



The overall thrust of the DTC Bill will be on bringing about simplification of direct tax system including personal Income Tax and Corporate Tax with “an in-built bias” in favour of moderation of tax rates, sources close to the preparation of draft legislation said.



Provisions of the DTC Bill stipulating the tax rates in direct tax front including Income tax and Corporate Tax will come into effect once it the legislation is approved by both houses of Parliament.



The government plans to implement various provisions of the DTC Bill with effect from April One 2011.



It is learnt that the government is likely to introduce the DTC Bill either tomorrow or next Monday in both houses of Parliament. After its introduction the draft DTC will be sent to Select Committee of both houses for scrutiny.



After examining the recommendations of the Select Committee the government will move the DTC Bill for approval of Parliament in the Winter Session.



Later, talking to newspersons, the Finance Minister Pranab Mukherjee said, “The whole objective is that a plethora of exemptions will be limited. (Income) tax slabs will be three. Rate of taxes will be taken in the schedule so that they need not be changed every year,” he said. The Finance Ministry submitted the draft DTC Bill for consideration of the Cabinet after examining responses from various stake holders including trade, industry and corporate sector.



Source: Deccan Herald

Cabinet likely to consider DTC Bill on Thursday

Cabinet likely to consider DTC Bill on Thursday



Struggling to meet the deadline of introducing a much awaited tax reforms bill, the Cabinet is likely to consider the Direct Taxes Code on Thursday, a move aimed at rationalising rates and improving tax compliance.



A proposal is before the Union Cabinet for consideration and passage of the DTC Bill, a source told PTI.



The government plans to introduce DTC, which will replace the archaic Income Tax Act, from next fiscal. The government is, however, unlikely to meet the deadline for introduction of yet another important piece of tax reforms - the Goods and Services Tax.



If introduced in the monsoon session that ends on August 31, the DTC Bill is expected to be referred to a Parliamentary Standing Committee on finance and may be passed during the winter session to make the reforms effective from the deadline -- April 1, next year.

Source: PTI

CAT pulls up DTC for dismissing employee unfairly

Central Administrative Tribunal(CAT) pulls up DTC for dismissing employee unfairly




The Central Administrative Tribunal (CAT) has rapped the DTC for terminating the services of a driver on medical grounds, though he had performed the job for over 23 years with the same disability.



The CAT wondered how the corporation could terminate the services of Munshi Lal who had a clean track record despite driving the vehicle without an index finger.



"It is very strange that the driver whose injured index finger (which was amputated) has not come in the way of efficient discharge of duties from 1982 to 2005 for which there is no complaint...on record... yet on the same alleged disability holding him unfit to perform duty on re-employment upto 60 years, when the position has not been altered, the DTC has not acted fairly," the Tribunal said.