7/30/2019 Direct Tax code India

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India's Finance Minister has said that he hopes to see the new Direct Tax Code(DTC) in operation from April, 2013, stressing that the Income Tax Departmentmust now ready itself for the transition.

Mukherjee made the comments at the Annual Conference of ChiefCommissioners and Director Generals of Income Tax. During his speech, he saidthat the DTC will effect a much awaited transformation in the country's taxstructure and its administration.

At present, direct taxes contribute around 56% of total central government taxrevenue in India. Mukherjee credited policy innovations, the rationalization ofthe tax structure, and improvements in tax administration and taxpayer servicesfor helping to bolster growth in this area over the last five years. He said that overthe past decade, for every 1% growth in gross domestic product, the governmentalso saw a 1.9% rise in direct tax collections. The Income Tax Department ischarged with increasing tax collections by 15% over the course of the currentfinancial year.

Mukherjee added that he will introduce an amended Direct Tax Code Bill intoparliament during the forthcoming Monsoon Session. The Bill's reintroductionfollows its examination by the Standing Committee on Finance, which hassubmitted a report on the government's proposals.

In March, Mukherjee used his Budget speech to tell parliament that, while thegovernment had intended to implement the DTC from April this year, it had notreceived the Committee's report in time to do so. Mukherjee said at the time thatthe government would examine the Committees recommendations and takesteps to enact the DTC at the earliest possible opportunity. During his speech to

the Conference, he confirmed that now he hopes to see the Code become effectivefrom April 1, 2013.

In the meantime, Mukherjee expects the Income Tax Department to prepareitself for the transition from the Income Tax Act 1961 to the new DTC regime. Heexplained: "It would include addressing various issues like [the] reframing ofrules and forms, redrawing of business processes, training needs of humanresources and the necessary infrastructure needs for smooth transition to the newregime. All this has to be completed in a manner so as to avoid any inconvenienceto taxpayers and also to sustain the revenue buoyancy."

Computerization work must also continue, to cover all areas of work and all

employees in the Department. This, Mukherjee said, "will not only improve thequality of service, but also bring transparency and uniformity to procedures anddecision making process".