I-T rates in direct tax code list

Last updated: 26 March 2007 Follow on Google News

The government is planning to place the income-tax rates in the new direct tax code schedule. The schedule is akin to an annexure to the Act. This will give the government flexibility to change them without disturbing the whole Act.

“We are looking at substantive changes in the Act, giving a fresh look at various procedures,” a revenue department official said, adding the main objective would be keep the main body of the Act simple and taxpayer-friendly.

Including the tax rate in the schedule would allow the government to change rates by just proposing an amendment to the schedule without amending the body of the Act.

In situations where the government is unable to specify income-tax rates in the Finance Bill, there is no provision in the law allowing tax authorities to impose a certain rate. In fact, the present Act clearly mentions the rate of taxation would be specified in the central Act.

“It is expected that the new direct tax code will further simplify the income-tax law and be simpler to understand. Further, if the rates of taxation are provided in the schedules forming part of the Act itself, then it will avoid litigation in respect of the tax rates and additional levies such as surcharge, cess, etc,” according to KPMG director Vikas Vasal.

Imposition of cess and surcharge has been challenged in various courts of law as these were brought in the Finance Act and there was no provision specifying the levies in the Act.

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CCI News Desk

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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