By IANS,
New Delhi : The government Tuesday released a 35-page revised discussion paper on the draft direct tax code, which seeks to replace the 50-year-old Income Tax Act, after receiving more than 1,600 responses from stake holders.
Revenue Secretary Sunil Mitra, who spoke to reporters just ahead of the release of the document, said comments will be invited once again and the ministry will hold a major seminar before finalising an appropriate bill for consideration by parliament.
“We hope to table the bill in the winter session,” the revenue secretary said, giving an update on when the government proposed to present it before parliament to enact a law that will replace the Income Tax Act.
He also made it clear that fixing tax slabs for individuals or for the corporate sector was the parliament’s prerogative and that was the reason why the revised paper did not dwell on the matter.
The salient features under 11 categories proposed Tuesday in the revised draft include:
-Tax exemption on maturity for all existing approved provident and pension schemes
-Employer’s contribution to provident fund and such schemes within prescribed limits shall not be considered as salary
-Money from gratuity, voluntary retirement scheme, pension at retirement to be tax exempt subject to specified limits
-Rent on owned house property will be the amount of rent received for the year and not presumed
-Wealth tax will be levied broadly on the same lines as provided in the Wealth Tax Act, 1957.
-In case of house property which is not let out, the gross rent will be nil
-Measures on capital gains tax modified to benefit low and middle income category of taxpayers
-No change in proposal to impose capital gains tax even if shares are held for over one year
-Capital gains for foreign funds will not be subjected to TDS
-Company incorporated outside India to be treated as resident in India if its effective management in within the country.
At a conference on direct taxes earlier this month, Finance Minister Pranab Mukherjee had hoped that the new code — which seeks to make tax laws simpler and free individual assessees from the clutches of chartered accounts – will take effect March 1, 2011.
“It will indeed be legislation for the 21st century, which will witness the emergence of an economically strong and vibrant India,” he said.