Tax code to reduce rates, says finance minister

Finance Minister Pranab Mukherjee today said the proposed Direct Taxes Code (DTC) was aimed at reducing tax rates and giving substantial exemption to people, even in the high-income bracket, while bringing evaders in tax net. At present, it is being examined by a parliamentary committee, following which it would be ratified for implementation.

“We want to reduce the taxes. Even those in the very high-income bracket will get exemptions under the new law. We want to reduce the tax rate, but at the same time, bring those who evade taxes in the net,” said the minister at the inauguration of an income tax (I-T) office today.

The government has also launched a campaign to bring evaders in the tax net by opening more I-T offices in the country. DTC also aimed at simplifying the language of the text, by removing complex sentences, Mukherjee added.

The minister said the tax to gross domestic product ratio had improved 14 per cent, as against seven-eight per cent few years back, which helped the government roll out schemes such as the debt waiver and relief scheme worth Rs 70,000 crore in 2008.

There was also a need to increase national income to generate more employment and resources for the government, he said.