FM to meet biz chambers on direct tax code tomorrow

Finance Minister Pranab Mukherjee will meet leading industry chambers here tomorrow to discuss issues arising out of the proposed new direct tax regime, that will replace the archaic Income Tax Act and other related direct tax legislations.

The three industry bodies, CII, Ficci and Assocham are expected to take a common stand on different contentious issues that will confront the businesses once the new direct tax code comes into effect.

At the meeting to be held at Vigyan Bhawan, senior tax officials will also be present.

The government released the draft direct tax code for public discourse last month. The code will replace the Income Tax Act of 1961 and other related laws once approved by Parliament.

The draft tax code, aimed at reducing concessions and making the tax laws simple, has raised various issues with the industry and other stakeholders.

For instance, the proposed code suggests abolishing the securities transaction tax-- levied on deals at the bourses-- but seeks to reintroduce long-term capital gains tax.

The drat code also proposes that minimum alternate tax (MAT) of two per cent would apply on the gross asset value of a company instead of current levy of 15 per cent on book profits.

The industry is believed to be opposed to this draft provision on the ground that it would have to pay MAT from the day it acquires both movable and immovable assets.