Govt releases new DTC draft, addresses 11 key issues

The government today said that it will introduce a draft legislation on the Direct Taxes Code (DTC), which would replace half-a-century old Income Tax Act, in Parliament in the forthcoming monsoon session.

"If Parliament procedure is complete and it becomes a law, it will be implemented from April 1, 2011," Revenue Secretary Sunil Mitra told reporters after releasing the revised DTC draft.

On the proposed tax slabs, Mitra said, they would be reflected in the draft legislation to be placed before Parliament.

He said the revised draft has sought to address major concerns of stake holders. These include treatment of the Minimum Alternate Tax (MAT), taxation of long-term savings, capital gains and housing loans. Minimum Alternate Tax paid by eligible companies to be
computed based on profits and not on assets and retirement funds to continue to be exempt from tax on withdrawal.

The government, Mitra said, had received 1,600 comments on the first draft released last year.

The bill, overhauling India's direct tax laws, will be referred to the standing committee of Parliament after introduction.

The Parliament panel, he added, would again consult the stakeholders, Mitra said.

Finance Minister Pranab Mukherjee had promised in his Budget speech to implement the new direct tax laws from next fiscal.