Direct Tax

Topics: Tax, Taxation, Taxation in the United States Pages: 9 (3310 words) Published: February 19, 2013
ISSN : 2230-9519 (Online) | ISSN : 2231-2463 (Print)

IJMBS Vol. 2, ISSue 2, AprIl - June 2012

Assessee Perception towards Direct Tax Code (DTC)
1 1,2

Dept. of FMS, Gurukul Kangri University, Haridwar, UK, India tax regime as it is based on well accepted principles of taxation and best international practices. It will eventually pave the way for a single unified taxpayer reporting system. The Philosophy behind such replacement is to make the Direct Taxes Code very easy and simple so that tax payers themselves can, without help of experts compute and file Income Tax Returns. In planning and framing an ideal Income Tax Structure of a welfare state like ours the objectives are to give relief to the maximum possible extent to the lower and middle income group taxpayers and check creation of black money at one hand and to enable the Government to increase collection of tax revenue for development works on the other. The Direct Taxes Code (hereafter referred to as the ‘Code’) is not an attempt to amend the Income Tax Act, 1961; nor is it an attempt to “improve” upon the present Act. In drafting the Code, the Central Board of Direct Taxes (the Board) has, to the extent possible, started on a clean drafting slate. Some assumptions which have held the ground for many years have been discarded. Principles that have gained international acceptance have been adopted. Hence, while reading the Code, it would be advisable to do so without any preconceived notions and, as far as possible, without comparing the provisions with the corresponding provisions of the Income Tax Act, 1961. A. Highlights of DTC Earlier Income Tax Act and Wealth tax Act are abolished and single code of Tax, DTC in place. Some of the major highlights of New DTC are – 1. Concept of Assessment year and previous year is abolished. Only the “Financial Year” terminology exists. 2. Only status of “Non Resident” and “Resident of India” exits. The other status of “resident but not ordinarily resident” goes away. 3. Earlier the terminology of ‘Assessee’ was meant for the person who is paying tax and/or, who is liable for proceeding under the Act. Now it has been added with 2 more definitions namely a person, whom the amount is refundable, and/or, who voluntarily files tax return irrespective of tax liability. 4. Income to be now classified under two broad categories: • Income from special sources; and • Income from ordinary sources. 5. Income from Special Sources includes income taxable at special rates like income of non-residents, winning from lotteries and horse races etc. Income from Ordinary Sources includes: • Income from employment; • Income from house property; • Income from business; • Income from capital gains; and • Income from residuary sources. 6. Housing Loan Interest for Self Occupied house disallowed. 7. Returns to be processed within one year, otherwise no demand notice can be raised. 8. VRS Gratuity and commuted pensions, taxable if not invested in approved savings, will be taxable on withdrawals. 9. Government and Non-Government Taxation Difference removed. 10. Savings limit eligible for deduction increased to Rs. 3 lakhs from the current Rs. 1 lakh. InternatIonal Journal of ManageMent & BusIness studIes

Dr. Kamal Pant, 2Ashish Arya

Abstract The New Direct Tax Code which was said to be introduced from the financial year, 2012-13 replacing the five decade old Income tax Act,1961 has the objective to make the Indian tax structure straightforward. The Income Tax Act 1961 has become very complex and virtually unintelligible to the common man by virtue of a complicated structure, numerous amendments, frequent policy changes and a multitude of judgments that gave varying interpretations to already undecipherable provisions. This complexity has not only increased the cost of compliance for the average tax payer, but also made it costly for the administration to collect tax. For the replacement of Income Tax 1961, the new Direct Tax Code which is...
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