Finance Minister Arun Jaitley today said the government will review the ambitious Direct Taxes Code, which proposed overhaul of the six-decade old Income Tax Act in its present shape and take a view on the whole matter.
"On Direct Tax Code (DTC), the Government will consider the comments received from stakeholders. It will review the DTC in its present shape and take a view in the whole matter," he said while presenting the Union Budget for 2014-15.
The Standing Committee on Finance headed by Senior BJP leader Yashwant Sinha had submitted its report on 'The Direct Taxes Code Bill, 2010' in March 2012. The Bill was introduced in the Lok Sabha in 2010.
Among other things, the Committee had suggested raising the income tax exemption limit to Rs 3 lakh as against Rs 2 lakh proposed in the DTC Bill, 2010.
The Income Tax Act was enacted in 1961. The first draft prepared by Chidambaram in 2009 had proposed a income tax slab from Rs 1.6-10 lakh, Rs 10-25 lakh and Rs 25 lakh and above. Besides, the corporate tax was proposed at 25 %.
This was followed by the draft DTC Bill prepared by the then Finance Minister Pranab Mukherjee in 2010 which proposed the slabs at Rs 2-5 lakh (10 %) , Rs 5-10 lakh (20 %) and Rs 10 lakh and above (30 %). Here the corporate tax was proposed at 30 %.
The Standing Committee in its recommendation suggested the slabs in the brackets of Rs 3-10 lakh, Rs 10-20 lakh and Rs 20 lakh and above. On corporate tax, it recommended that the rate be retained at 30 %.
The current rates for income tax would continue at 10, 20 and 30 % respectively.