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."