NEW DELHI: BJP leader Yashwant Sinha-headed parliamentary standing committee on finance will meet on Friday to finalise its report on the Direct Taxes Code Bill, which seeks to replace the 60-year-old income tax law.
"Tomorrow's meeting could take a final view on the report," said an MP who is part of the panel.
The panel has scrutinised the code in detail and has suggested several changes, including further widening of income tax slabs, lowering of wealth tax threshold and anti-abuse provisions with riders to ensure that taxmen don't get discretionary powers to harrass taxpayers.
With the standing committee expected to give its report in the upcoming Budget session, the government may not be in a position to move a reworked bill for passage in Parliament immediately. The new law is now likely to be implemented only from April 2013. The bill was to come into effect from April 1, 2012.
"Officials will have to work on amendments to the code and with the ongoing work on Budget it may not be possible to bring the amendments in the budget session," said an income tax official.
The government, on its part, is contemplating bringing some of the provisions proposed in the code in the Budget for 2012-13, having already made a start by imposing minimum alternate tax on special economic zones.
The DTC proposes General Anti-Avoidance rule, or GAAR, that allows for examination of the real nature of transaction and invalidates arrangements entered into to avoid tax.
It also proposes to tax transfers outside India of shares in a foreign company, in proportion to the fair market value of assets located in India. This rule will apply if the fair market value of assets in India exceeds 50% of the value of all assets owned by the foreign company.
The code proposes to raise the personal income tax exemption limit to Rs 2 lakh and a corporate tax rate of 30%. It proposes to tax net wealth exceeding Rs 10 crore at the rate of 1%.
Source : economictimes.indiatimes.com