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Monday, February 28, 2011

Direct tax code: Will be implemented from next fiscal year

Direct Tax Code was one of the highlights of the Union Budget 2011-12 in India this year. At the budget session, Pranab Mukherjee said that Direct Taxes Code (DTC) will be introduced from April 1, 2012. It will replace the country’s current Income-Tax Act. Currently, it is being reviewed by the standing committee.
The DTC Bill was introduced in Parliament in 2010. Under the Direct Taxes Code tax exemption limit has been extended up to Rs. 2 lakh compared to the current Rs. 1.6 lakh.
With DTC, government will levy 10 percent tax on people who earn between Rs. 2lakh to Rs. 5 lakh, 20 percent on people earning Rs.5-10 lakh and 30 percent on an income of Rs.10 lakh and above.
As the government is planning to introduce DTC from the next fiscal year, Mr. Pranab Mukherjee did not introduce any serious changes in the budget this year.
Normally, top auditing and tax consultancy firms like PriceWaterhouseCooper (PwC) and Ernst & Young arranged post-budget conferences but this time they did not arrange such conference for there was not any major tax-reforms. Instead, the firms communicated with their clients via live web-cast.
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