DIRECT TAX CODE
PRESENTED BY:
MOHAMMED NADEEM
OVERVIEW
Introduction
Types of tax
Direct tax code
Features
Issues and analysis
Conclusion
INTRODUCTION
A fee charged by a government on a
product, income or activity.
Taxes in India are levied by the Central
Government and the State Governments.
The authority to levy a tax is derived
from the Constitution of India.
Continue…
No tax shall be levied or collected except by
the authority of law.
Passed either by the Parliament or the State
Legislature.
The CBDT provides essential inputs for
policy and planning of direct taxes in India.
Purpose
Revenue generation
Redistribution of money
Repricing
Representation
Types of tax
Tax
Direct taxes Indirect taxes
Continue…
Direct tax means a tax paid directly to the
government by the persons on whom it is
imposed.
Example
Corporate Income taxes
Personal Income Tax
Capital Gains Tax
Continue…
Indirect tax means a tax that increases the
price of a good so that consumers are actually
paying the tax by paying more for the products.
Example
Excise Duty
Customs Duty
Service Tax
The direct tax code
The government introduced the landmark
Bill, The Direct Taxes Code Bill in 2009.
It will impact investments, borrowings, and
expenses.
The Direct Taxes Code (DTC) is said to
replace the existing Indian Income Tax Act,
1961.
Continue…
The Bill widens income tax slabs for individuals.
The Bill removes several tax deductions currently
allowed such as those on investments in life
insurance or provident funds.
The Bill raises the wealth tax exemption limit
Highlights of the Direct Taxes Code
Income tax exemption limit proposed at Rs. 2
lakh per annum, up from Rs. 1.6 lakh.
10 per cent tax on annual income between Rs.
2-5 lakh, 20 per cent on between Rs. 5-10 lakh,
30 per cent for above Rs. 10 lakh.
Tax burden at highest level will come down by
Rs. 41,040 annually
Continue…
Proposal to raise tax exemption for senior
citizens to Rs. 2.5 lakh from Rs. 2.4 lakh
currently
Corporate tax to remain at 30 per cent but
without surcharge and cess
MAT to be 20 per cent of book profit, up from
18.5 per cent
Continue…
Proposal to levy dividend distribution tax at 15 per
cent
Exemption for investment in approved funds and
insurance schemes proposed at Rs. 1.5 lakh
annually, against Rs. 1.2 lakh currently
Proposed bill has 319 sections and 22 schedules
against 298 sections and 14 schedules in existing IT
Act
Features
Single Code for direct taxes.
Use of simple language.
Reducing the scope for litigation.
Flexibility.
Continue…
Consolidation of provisions.
Providing stability.
Elimination of regulatory functions.
Ensure that the law can be reflected in
a Form.
Key issues and analysis
It is not possible to assess the net impact on
government revenues of the new tax
proposals in the Code.
The Bill lowers the tax rate for those who
earn between Rs 3 lakh and Rs 25 lakh, as
compared with the Act.
Continue…
Under the Bill, companies will be charged a
minimum alternate tax on their assets, rather than
profits as is currently the case.
The Bill removes a range of tax incentives allowed
to companies under the Act, such as those for
investments in backward areas and exports, as
these could distort investment decisions.
Conclusion
"It was only for the good of his subjects
that he collected taxes from them, just
as the Sun draws moisture from the
Earth to give it back a thousand fold“
Kalidas in Raghuvansh eulogizing
KING DALIP.
THANK
YOU!!!
QUESTIONS???