Follow Us :     View Tm- India's profile on Pinterest   View Tm- India's profile on LinkedIn   Subscribe   Follow us on Twitter   Find us on Facebook

Direct Tax Code India

The direct tax code seeks to consolidate and adjust the law relating to all direct taxes, namely, income-tax, dividend distribution tax, fringe benefit tax and wealth-tax so as to establish an economically efficient, effective and equitable direct tax system which will facilitate voluntary compliance and help increase the tax-GDP ratio. Another objective is to reduce the scope for disputes and minimize litigation. It is designed to provide stability in the tax regime as it is based on well accepted principles of taxation and best international practices. It will finally pave the way for a single unified taxpayer reporting system.

The salient features of the code are:

Single Code for direct taxes: All the direct taxes have been brought under a single Code and compliance procedures unified. This will eventually pave the way for a single unified taxpayer reporting system.

Flexibility : The structure of the statute has been developed in a manner which is capable of accommodating the changes in the structure of a growing economy without resorting to frequent amendments. So, to the extent possible, the important and general principles have been reflected in the statute and the matters of detail are contained in the rules/schedules.

Ensure that the law can be reflected in a Form: for most taxpayers, particularly the small and marginal category, the tax law is what is reflected in the Form. Therefore, the structure of the tax law has been designed so that it is capable of being logically reproduced in a Form.

Consolidation of provisions: In order to enable a better understanding of tax legislation, provisions relating to definitions, incentives, procedure and rates of taxes have been consolidated. Further, the different provisions have also been rearranged to make it consistent with the general scheme of the Act.

Elimination of regulatory functions: Usually, the taxing statute has also been used as a regulatory tool. However, with regulatory authorities being established in different sectors of the economy, the regulatory function of the taxing statute has been withdrawn. This has extensively contributed to the simplification exercise.