Direct Tax Code and Retail Industry

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Direct Tax Code and Retail Industry

( Ms. Shishma Kushwaha
( ( Dr. M.K. Gupta
Abstract:
The new Direct tax code is going to replace the existing income tax act of 1961 in India. It is expected to be passes in the monsoon session of 2010 and is expected to be enforced from 1st April 2011. It will completely overhaul the existing tax proposals for not only individuals but also for corporate houses and foreign residents. Tax rates and slabs have been modified. It proposes a significant increase in the tax rates and slabs for persona income tax and the tax deduction limit available on savings from Rs. 1 lakh at present to Rs. 3 lakh. It has also proposed to reduce the corporate tax rate from 33% (including surcharge) to 25% which will benefit various sectors in the economy. Retail industry is also one of the industries which are going to be affected by the new direct tax code with the change in disposal income with the individual and change in corporate tax. In the given research paper, researcher has found that the Direct Tax Code will have a positive impact on the retail industry as it would help the Indian Retail Industry to face the challenges likewise to get more investment and better infrastructure but at some point it will be neutral so the net effect will be the positive one for the Indian Retail Industry .

(Lecturer, JIMS, New Delhi(Affiliated to Guru Gobind Singh Indraprastha University, New Delhi) & Ph.D research scholar, Pt. J.L.N. Govt. P.G. College, Department of Commerce, Faridabad, Haryana, India. (Affiliated to Maharishi Dayanand University, Rohtak, Haryana, India. E-mail: shish_kush@yahoo.co.in

((Associate Professor in Commerce, P.G. Department of Commerce, Govt. P.G. College, Faridabad. E-mail: mkgupta1965@yahoo.co.in

Direct Tax Code and Retail Industry

Introduction to New Direct Tax code:

The new direct tax code is said to replace the existing Income tax act of 1961 in India and expected to be passed in the monsoon session of 2010 and is expected to be enforced from 2011. During the budget 2010 presentation, the finance minister Mr. Pranab Mukherjee reiterated his commitment to bringing into force the new direct tax code (DTC) from 1st April 2011.

The new Direct Tax Code will completely overhaul the existing tax proposals for not only individual tax payers, but for the corporate houses and foreign residents. The most striking feature is the rationalization level of tax slabs at various levels. The tax slabs have been liberalized to a great extent.

Highlights of the New Direct Tax Code:

1. The concept of Previous Year has been replaced with Financial Year.

2. Income has been broadly classified into two heads i.e.:

a. Income from Ordinary sources.

i. Income earned as salary

ii. Income from Business or Profession

iii. Income from house property

iv. Capital gains

v. Residual income from miscellaneous sources.

b. Income from Special Sources.

i. Winning from lotteries

ii. Winning from horse race etc.

iii. Specified income of non- resident

3. Any losses arisen due to ordinary sources can be set off or carried forward against income from Ordinary sources without any time limit. In the same manner, it is applicable to income from special sources.

4. Earlier, it proposed to remove most of the categories of exempted income likewise tax exempt status currently available to withdrawals...
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