Proposed DTC to ensure simpler, more rational tax regime: FM

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Ahmedabad, June 16 (PTI) A day after his ministry dropped contentious proposals in the discussion paper on the Direct Taxes Code, Finance Minister Pranab Mukherjee today said here that the proposed law will ensure a simpler and more rational direct tax regime. He asked senior income tax officials here to organise training for staff at all levels to meet the challenges of switching over to the proposed new taxation regime, which will replace the decades-old Income Tax Act. "A major tax reform initiative has already been announced in the proposed ''Direct Taxes Code 2009'' to simplify, rationalise and consolidate the laws and procedure, relating to direct taxes," Mukherjee said after laying the foundation stone of the new office building of the Income Tax Department here. He said in order to improve compliance further, tax laws have to be simple, stable and robust, tax rates should remain moderate and multiplicity of tax exemptions and deductions should be gradually phased out, in order to widen and deepen the tax base. Besides other things, in the revised DTC draft released yesterday, the government dropped a contentious proposal to tax retirement benefits like PF on withdrawal, as well as a move to levy Minimum Alternate Tax on corporates based on their assets, from the earlier draft. The code, however, does not give any details on the Income Tax structure, such as the slabs or rates, leaving the issue to be tackled in the Direct Taxes Code Bill, to be tabled in the next session of Parliament. Mukherjee said that tax administration needs to be further toned up by appropriate use of technology on the one hand and improving professional competence and responsiveness of the employees on the other. "I have directed the Human Resource Directorate of the Department to draw up plans for training in cooperation with tax training institutes for capacity building for smooth transition to the new legislative regime. I have recently announced that Advanced Mid-Career Training Programme (AMCTP) for IRS officers would be started during the current year," he said. Similar training should be organised by the local Chief Commissioners for employees at all levels to improve the skills of its employees to meet the challenges of switching over to the new tax regime. .

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