Direct Tax Code an Overview

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ACKNOWLEDGEMENT

It has always been my sincere desire as a management student to get an opportunity to express my views, skills, attitude and talent in which I am proficient. A project is one such avenue through which a student who aspires to be a future manager does something creative. This project has given me the chance to get in touch with the practical aspects of management. I am extremely grateful to the University of Mumbai for having prescribed this project work to me as a part of the academic requirement in the Bachelor of Management (BMS) course. I would also like to thank the BMS Coordinator, Dr. Kailash Chandok for all his support and help. I also appreciate all the support provided by the library staff and the teaching and supporting staff of Jai Hind College for providing all the necessary academic content and the entire state of the art infrastructure and resources to enable the completion of my project. Finally, I thank all my friends and family members who have directly or indirectly helped me towards the execution of this project.

INDEX
Sr. no. | Topic | Page no.|
1.11.21.31.41.51.61.71.81.91.101.111.122.12.22.32.42.52.62.72.82.92.103.13.23.33.3.13.3.23.43.53.63.73.7.13.83.93.104.14.24.35.15.25.35.4| Chapter 1BackgroundForeword Introduction and OverviewStructure of the Income-Act, 1961, Wealth-Tax Act, 1957 and DTCObjective of the CodeSalient features of the CodeBasis of chargesResidential statusSource rulesTax rate and slabClassification of IncomeAggregation of income and carry forward of lossesChapter 2Computation of Total IncomeIncome from EmploymentIncome from House PropertyIncome from BusinessCapital gainDeduction from Total IncomeTaxation of non-profit organization NPOsWealth-TaxPersonal-TaxCorporate-TaxChapter 3International-TaxGrandfathering provision for SEZ development and SEZ unitsAnti-abuse provisionsGAARCFCTax-IncentivesTax treatment for saving- EET VIS-À-VIS EEE basisDTAACompliance and procedural provisionsA return of Income and assessmentAppealsRevision of orders by CITPenalties and prosecutionChapter 4NPOs related provisionsOther residuary provisionsOther provisionsChapter 5Current scenario(2011-12)ConclusionGlossaryBibliography| 445566789910111112131416192021222224242424252526262627272828292930353637|

1.1 Background

 Present income-tax law in India of 1961 which replaced 1922 law.  Draft Direct Tax Code (DTC) 2009 unveiled in August 2009 for simplification / keeping pace with changing business landscape.  Indian Government received more than 1,600 representations on DTC 2009.  Revised Discussion Paper (RDP) released in June 2010 on 11 specific issues.  DTC 2010 tabled in the Indian Parliament on August 30, 2010.  After clearance from the Parliamentary Standing Committee, DTC 2010 may be passed in the Winter Session.  The DTC 2010 proposed for effective from FY commencing April 1, 2012.  The DTC 2010 to be effective from FY commencing April 1, 2013.

1.2 Foreword

The DTC Bill, 2010 introduced in the Parliament is proposed to be made effective from 1 April 2013. While some onerous provisions from the second draft of the DTC have been rightly dropped after representations, several proposals in the DTC are still likely to compel the corporate to rethink their existing structures and mode of conducting business. For example, the DTC proposes to tax transfer of shares of a foreign company, on the basis that there is a transfer of a capital asset situate in India, if the fair value of the assets situated in India constitute at least 50 percent of the assets directly or indirectly held by the foreign company. Further, an overseas company with a place of effective management in India will now be treated as a tax resident in India and would be consequently liable to tax in India on its global income. Other provisions of interest to India Inc. relate to APA and the GAAR. The former is a very welcome step and will go a long way in minimizing the...
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