DTC Bill in Monsoon Session, says FM

Finance minister Pranab Mukherjee said on Tuesday the Direct Taxes Code (DTC) Bill will be  introduced in the monsoon session of Parliament. The government will examine recommendations of the Standing Committee on Finance and incorporate these in the proposed tax reform law, Mukherjee said in the Rajya Sabha.

He moved the Finance Bill, 2012 — already approved by Lok Sabha — for consideration and passing in Rajya Sabha. Mukherjee said he will go through the Committee’s recommendations after the completion of the budget session. The DTC Bill will be brought in Parliament for approval of both houses after obtaining the Cabinet's approval.

“At that stage many of the recommendations of the standing committee will be accepted,” he said. The minister said he could not go through the all the recommendations the Standing Committee on DTC as the report was given on March 9 and Finance Bill presented on March 16. “...therefore it was quite natural that I could not take into account all major recommendations on the DTC,” he said.

Mukherjee faced criticism for introducing General Anti-avoidance Rules (GAAR) in the Finance Bill 2012, without taking into account the standing committee's views on these rules. He later deferred implementation of GAAR by one year after widespread opposition from foreign investors.

The DTC Bill aims to reform the tax system by replacing the Income-tax Act, 1961. Along with the Goods and Services Tax (GST), which will stitch together various indirect taxes in the country, it is aimed at reforming the entire tax system. The committee on DTC headed by BJP leader Yashwant Sinha has suggested various changes in the bill including a sharp increase in the tax exemption limit as well as the cap on tax-exempt savings.

The committee recommended 50% increase in the exemption limit for savings to R1.5 lakh to encourage long-term savings.

Financial Express, New Delhi, 16-05-2012