Major Highlights of Direct Tax Code 2009:

- Rates of tax to be uniform

- Security transaction tax to be abolished

- Business losses can be carried forward indefinitely

- Effective corporate tax rate at 25%

- To scrap long, short-term capital gains distinction

- To abolish Securities Transaction Tax

- No tax deduction on interest payable on any government security

- Base year for calculation of capital gains tax moved to April ‘00

- Tax deduction limit on savings to be hiked to Rs 3 lakh

- Wealth tax liability to be discharged by payment of pre-paid taxes

- Income from certain transfers not be treated as capital gains

- Income tax slabs proposed to be changed; highest tax rate of 30% for individuals to be applicable for income over Rs 25 lakh

- Taxation of all non profit organisations rationalized

- Profits of non-life insurance business to be disclosed annually

- Government may enter overseas agreements for double taxation avoidance

- No tax deduction on interest payable to banking companies, insurers

- FMCG, metals to benefit from 25% corporate tax rate

- No distinction between long- and short-term capital gains welcome

- No incentive for long-term investor anymore

- No DDT on payment of divided to pass-through entities

- Tax on interest on overseas borrowing a negative

- May discourage leveraging and reduce investment

- Significant increase on slab rates for individual taxation welcome

- Will lead to disposable income and more investment

- STT to be abolished

- May have sentimental impact