Cabinet gives nod to Direct Taxes Code Bill

The Cabinet on Thursday approved Direct Taxes Code (DTC) Bill, clearing decks for tabling the legislation in the Monsoon Session of Parliament so that the new Act ushering in reduced tax rates and exemptions may come into effect from next fiscal. 

The Cabinet cleared the bill, highly placed sources said. When enacted, DTC will replace the archaic Income Tax Act and simplify the whole direct tax regime in the country. 

The code aims at reducing tax rates, but expanding the tax base by minimising exemptions. 

The Finance Ministry had earlier come out with a draft on the DTC bill, some of whose provisions drew strong criticism from industry as well as the public. 

To address those issues, the ministry brought out the revised draft, dropping earlier proposals of taxing provident funds on withdrawal and levying Minimum Alternate Tax on corporates based on their assets. 

"As of now, it is proposed to provide the EEE (Exempt- Exempt-Exempt) method of taxation for Government Provident Fund (GPF), Public Provident Fund (PPF) and Recognised Provident Funds (RPF) ...", the revised DTC released by the Finance Ministry said. 

The revised draft also puts pensions administered by the interim regulator PFRDA, including pension of government employees who were recruited since January 2004, under EEE treatment. 

The first DTC draft had proposed to tax all savings schemes including provident funds at the time of withdrawal bringing them under the EET (Exempt-Exempt-Tax) mode. 

Under the EEE mode, the tax exemption is enjoyed at all the three stages--investment, accumulation and withdrawal. 

As regards MAT, it has been clarified that tax would be levied on the book profit, as is the current practice, and not on gross assets has proposed in the draft. The government, Mitra said, had received 1,600 representations on the first draft which was made public in August last year. 

The second draft, however, did not give any details on the income tax structure such as the slabs or rates, which were provided in the first draft released in August 2009. 

The first draft had suggested 10 per cent tax on income from Rs 1.60-10 lakhs and 20 per cent on income between Rs 10-25 lakhs and 30 per cent beyond that. However, officials later said these slabs were illustrative. 

The officials said the tax rates would be made known only in the proposed Act. 

The earlier DTC draft had proposed to reduce the corporate tax to 25 per cent from the present 30 per cent. The revised proposal has also made it clear that tax incentives on housing loans will continue. Payment on interest on housing loans up to Rs 1.5 lakh will continue. The earlier draft was silent on housing loans.


View Direct Tax Code 2009

Cabinet likely to consider Direct Tax Code Bill tomorrow (26.08.2010)

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

Meeting with CBDT on 4th Aug : Income Tax employees to get mobile connection, F.M. agreed.

The Joint Council of  Action [JCA] of Income Tax Staff Association met the Chairman CBDT on 4^th August, 2010 for Quarterly Review Meeting. The outcome of the meeting has not been made available either by ITEF or ITGOA. On 11.08.2010, CBDT has made it available.

Following are the important points came out of the discussion.

1. DG Systems will reexamine the suggestion made by JCA regarding processing of CPU by employees.
2. F.M has sanctioned mobile connections for all employees. It may take 3-4 months to materialize.
3. DPC for ITO to ACIT is to be done on 9/10th Aug, 2010.{It is reported to be done}
4. It was informed that pay anomaly arised due to VIth CPC is being resolved. Grade Pay to A.O./P.S. of Rs 4800/- is also under process.
5. laptop to all new ITOs but not to A.O. and P.S.

For exact minute of the meeting , Click Here.

IT dept turns to IRS officers to carry out tax raids

 Hit by the over two-week strike of its grade II field officers like inspectors, the Income Tax Department is roping in Indian Revenue Service (IRS) officers to carry out tax raids.

The Grade II officers are in the ranks of Income Tax Officers (ITOs) and Income Tax Inspectors (ITIs) and constitute the bulk of an I-T raiding team which are led by the officers of the IRS-- which is a central service on the lines of the Indian Administrative Service (IAS) and Indian Police Service (IPS).



The department recently conducted two survey operations in Mumbai, on a jeweller and a business house, without any of its field officers in the ranks of inspectors and others.


Source : PTI

Mobile for Taxmen : Agreement between Income Tax & BSNL soon.

Though there is no news from either ITEF or ITGOA regarding availability of mobile phones for the taxmen , we came to know that Income Tax Dept is going to sign agreement with BSNL for 50,000 mobile  and 21,000 Landline connections soon.


As per BSNL Employees' Association :
"It is a glad news that the Income tax department has decided to avail 50,000 mobile connections and 21,000 land lines from BSNL. Soon agreement will be signed between BSNL and Income Tax Department."

CBDT seems to be rigid, agitation of taxmen is on.

"The representatives of two Federations met the Chairman and other Board officials on 04.08.2010 and discussed the 12 point Charter of demands, once again. Official minutes of the same is awaited.

Thereafter, the JCA held a meeting and has unanimously decided to continue with the ongoing agitation program, for keeping up the pressure on the Board to concede to our just demands and all the Units are requested to implement the agitation program with full vigour and enthusiasm, until further communication."

Source : ITEF

The association is currently  on non cooperation with the management and their members are abstaining from any search and seizure operation which jeopardized the "Income Tax Raid" for the last two weeks.

Income Tax Return : Due Date Extended.

The CBDT has decided to extend the due date of filing of Income Tax returns from 31st July 2010 to 4th August 2010. All paper returns or e-returns filed on or before 4th August, 2010 would be considered as filed within the due.


View the Press Release

Income Tax Dept. Exam postponed. Fresh date announced. Motorbike for Income Tax Inspectors ?

Fresh Date for Dept. Exam
A news has been published in the June 2010 issue of "Aayakar", the monthly periodical from Intome Tax Employees Federation that CBDT has agreed to provided motorbikes to the ITIs out of the 1% incentive scheme.


A committee has been prepared in this effect in Delhi to finalize the process of procurement of 3000 motor cycles.


The details or authenticity of this news is yet to be confirmed from the Government side.

Income Tax Dept. Exam may be postponed, partially cleared candidates may get relaxation.

   Departmental  Examintion 2010

            The finer points concerning the conduct of examination 2010 was discussed with theDIT(IT) Examination and the other officials of the Directorate on 20^th inst.  The consensus arrived at is as under:

1.      Most of the points we submitted for the consideration of the conduct of examinationm2010 have been accepted.  Wherever there had been some differences, those were subjected to discussion and the following agreement has been reached.

2.      Ministerial Staff Examination.  The Exam this year will be under the old pattern.  The changes we had suggested in the new syllabus could be further discussed and agreement reached before the 2011 Examination.

3.      Inspectors Examination.  The final decision is that exemption would be granted for those papers cleared by the candidates under the old pattern. They will only take up those papers which are identified as analogous under the new scheme  to the papers under the old pattern. (Please see our letter to the Director dated 13^th July, 2010.

4.      In the case of ITOs examination, those who are yet to clear the I.T Law paper I and II under the old scheme will have to take up Paper I and IV under the new scheme. The papers cleared under the old scheme would be exempted.  The various papers identified under the new scheme  as analogous to the papers under the old pattern vide our letter of 13^th in all other cases have been accepted.

5.      Those who seek exemption in the papers already cleared will have to write those papers that are not cleared under the new patter identified as analogous, but in their case the conditions of the old examination rules will apply.

6.      In the case of Inspectors examination, the candidate would be required to obtain 50% to clear the paper had they availed the exemption.

7.      In the case of ITOs examination those who are to clear the O.P. paper, the Directorate will prepare an objection question paper in O.P. especially for those candidates.  

8.      The scheme so evolved will be in operation in perpetuity till the candidates who have availed the exemption pass the remaining papers or till such time they exhaust the number of changes or are age barred.

9.      The scheme is made applicable only for those who are to clear any two subjects.  In other words, those who are to clear more than two papers will have to write all the papers under the new scheme 

10.  In order to enable the Directorate to prepare for the agreed scheme and enlist the fresh candidates who would now become eligible to take up the examination, the examination schedule is likely to be postponed to commence from 25^th October, 2010 The intervening  Saturday has been agreed to be a working day for the examinees in order to ensure that all the three examinations are completed by 2^nd November, 2010.

11.  The Directorate will announce the  scheme after obtaining the requisite approval from the CBDT.

Source : ITEF

Though reference of a letter dated 13th July has been mentioned in the above communication, no such dated letter is found in the blog of ITEF. However a letter dated 7th July written in this context and handed over on 13th July is available. For the benefit of our viewers the letter is published below.

F.2./H.1/2009 Dated: 7^th July, 2010.

Shri. Kalyan Chand

Director General (Admn.)

Mayur Bhawan 5^th Floor, R.No. 501

Cannaught Circus

New Delhi. 110 001

Dear Sir.

Sub: Departmental Examination 2010-.

This is with reference to the discussions we had with you on 30.06.2010 on the above subject. During the discussions, it was indicated that Departmental Examinations 2010 are to be held under the new pattern and the request for having the examination on both the pattern as was done last year may not be possible in the case of Inspectors and ITOs examination. We were in that context, asked to elucidate the alternative suggestion of granting exemption to those candidates who had passed certain papers under the old patterns and are to take up examination only in those papers which are not cleared. Our suggestion in the matter is as under:-

ITOs Examination

Those who are yet to clear the following The paper they should clear under

Papers in old patterns new patterns _________________

1. IT Law-I & II Paper-I :- Income Tax Law and Other Taxes

2. Other Taxes Paper-III:- Allied Laws

3. Book Keeping Paper-II:- Advanced Accountancy

4. Office Procedure Office Procedure Paper of Inspectors Examination or a separate paper [objective] prepared separately for the purpose.

5. Examination of Accounts (Practical Test) The concerned CIT(Exam) may be asked to conduct this examination for the candidates who have not cleared this paper. No paper is required to be set up for this by the Directorate.

6. Hindi/Oral Test The CIT(Exam) in respective charge may be asked to take this examination locally. No paper need be set by the Directorate.

Inspectors Examination

1. IT Law-I & II IT Law and Computation

2. Book Keeping Book Keeping

3. Other Taxes Allied Taxes

4. Office Procedure Office Procedure

5. Examination of Accounts The CIT(Exam) in respective charge may be asked to take this examination locally. No paper need be set by the Directorate

6. Hindi Test

The CIT(Exam) in respective charge may be asked to take this examination locally. No paper need be set by the Directorate.

The candidates who are given exemption from writing the paper passed under the old scheme may have to pass the examination with minimum percentage of marks 50(45 in the case of SC/ST candidates) as was the case under the old scheme.

If our above proposal is agreed upon, there may not arise any requirement for conducting examination under the old pattern for ITOs and ITIs.

Ministerial Staff Examination

Under the old pattern there had been four papers which now form part of the two papers under the new patterns. Therefore it would be difficult to make out an alternative suggestions.. Therefore we suggest that the examination both under old and new pattern may be conducted this year.

If that be not the case then the alternative suggestion can only be the following

1) To split the Paper-I into two i.e.

a) Précis writing and drafting

b) Computer Basics

Computer Basics test be conducted only after imparting training especially when question are to be set in AST or ITD application. We therefore suggest that this being a practical

paper, the examination may be conducted locally by the CIT(Exam) after mounting a training programme of say a month or two. The candidates who are deployed for training will be subjected to the test at the conclusion of the training and failure therein will make them ineligible for promotion as they may not be declared to have passed/cleared the Ministerial Staff Examination. In that case those who have failed to clear Paper-I under old syllabus can be asked to take Paper-I under the new syllabus.

In the case of those who are to clear Service Rules (Paper – II) under old pattern and those who are to clear Office Procedure (Paper-III) under the old pattern may be asked to clear only that part in Paper-II under the new pattern which deals with the F.R, S.R and Taxation procedure etc. i.e. they may have to take up Part-A of Paper-II under the new scheme.

Those who have failed in Paper –IV may be asked to write Part-II of Paper-II under the new pattern. But with a condition that they have to secure 50% (45% in case of SC/ST candidates).

In respect of Hindi paper, the CIT(Exam) of each charge may be asked to conduct the said examination for those who has not qualified earlier under the old pattern.

Thanking you,

Yours faithfully,

Ashok Salunkhe

Secretary General

No Income Tax Raids ?

Rest Assured ! Taxmen may not be knocking at your door right now !
No search and survey from Income Tax Department is likely in near future. The Promotee officers and staffs combined association, Joint Council of Action has urged it’s members not to take part in any I.T. raid or survey unless the management accepts their long outstanding demands.

As most work in a search and survey operation is done by the striking employees, it is most likely that these operations will be suspended for a while.

The employees have already conducted a one day’s token strike on 15^th July to press for their demands.

View the demands.