Direct tax code?

The Cabinet on Thursday deferred the much-awaited Direct Taxes Code (DTC) Bill, presumably because a proposal to levy a super-rich tax on those earning above Rs 10 crore yearly did not find favour with some senior officials.

Planning Commission officials, apparently, took up with Prime Minister Manmohan Singh the proposal to impose the super-rich tax, proposed to be levied at 35 per cent on those earning above Rs 10 crore.

The Prime Minister intervened and Cabinet deferred the Bill, officials said. They said calls were made to former finance ministry officials who were instrumental in framing the original Bill, followed by a call by Planning Commission Deputy Chairman Montek Singh Ahluwalia to Prime Minister Manmohan Singh. However, this could not be verified. The thinking within a section of the government is that bringing in a super-rich tax at this juncture might not be a good idea, given the depressed economic sentiments.

The Bill is one of the eagerly awaited pieces of tax reform legislation, the other being the Goods and Services Tax (GST). When enacted, the DTC bill will replace the archaic Income Tax Act of 1961.

Courtesy : Business Standard