Friday November 6, 04:06 AM

Source: Indian Express Finance

Finmin to review tax code proposals on salaried individuals, property

By fe Bureaus
Providing relief to salaried employees, the finance ministry will review the provisions in the Direct Taxes on taxation of salaried individuals as well as taxation of income from house property in case of self-occupied property (SOP) by the individual. This was announced by finance minister Pranab Mukherjee in the meeting of the Parliamentary Consultative Committee on Finance. The outcome of the discussion would be used for modifying the proposals contained in the draft Direct Taxes Code, he assured the parliamentary committee. But even while Mukherjee has promised that the Code would be finalised only after comprehensive discussions with all stakeholders, North Block seems keen to push it into Parliament soon. In fact, it intends to introduce the Direct Taxes Code Bill in Parliament in a month s time - by the last week of the winter session. Government has identified nine critical areas for further detailed examination. These relate to the concept of minimum alternative tax; capital gains taxation in the case of non-residents; the Double Taxation Avoidance Agreement; General Anti-Avoidance Rule (GAAR); issues relating to effective management control and taxation of foreign companies in India; taxation of charitable organisations; shift from EEE to EET taxation system; taxation of income from house property in case of SOP by the individual; and taxation in case of salaried class employees, he informed the Parliamentary panel. Though the draft Code aims to modernise the decades old Income tax Act, a number of its provisions have not gone down well with the public and industry. For salaried individuals, the Code proposes a higher tax slab - where income between Rs 1.6 lakh to Rs 10 lakh would be taxed at a mere 10%, it has also mooted that all perquisites should be included in salary income. Further it has proposed to do away with exemptions such as house rent allowance, leave travel concession, leave encashment and medical reimbursement. Mukherjee however said the proposed slab rates for personal income tax would put more money in the hands of consumers while the rationalisation of deductions and exemptions are proposed in the code for reducing the rent seeking behaviour. He further said, We are trying to bring the new taxation regime, which can last for another 50 years. Therefore, our endeavor is to see that new taxation system should include the basic features and time tested procedures of existing act, which have survived judicial security over the years.