DTC Discussion Paper - Ill-begun and Half-done
JUNE 23, 2010
By Subhashree Kishore
THE Discussion Paper to revise Direct Tax Code arrived just as we were beginning to tire of Anderson campaign and football. Going by the euphoria over EEE and the air time grabbed by the new DTC one would expect it to be made of sugar and spice and everything nice.
Alas! We never learn.
Teams of experts and reams of paper later, we have a half filled answer sheet. The Paper solicits suggestions based on hazy outlines and a promise to look into ‘other issues' not part of this paper. The few changes we see are because of administrative difficulties and logistical challenges. Of course it is also mentioned that assessees would benefit. The concern to smoothen the path for Foreign Institutional Investors (FIIs) and Non-residents (NR) is quite apparent as the paper unabashedly bats for special tax regime to attract investments and promote depth of capital markets.
The individual assessee does have a few things to cheer about. Non-taxing of withdrawals from the Government Provident Fund (GPF), Public Provident Fund (PPF) and Recognised Provident Funds (RPFs), pension scheme of PFRDA and approved life insurance products has been proposed. This author in the article published in TIOL when draft DTC was placed in public domain last year [2nd Sep, 2009] had argued that withdrawal failed to satisfy the definition of income and the money had been saved from tax-paid or taxable income and it was not an additional income. The vociferous demand of salaried class including that of staff unions in this regard has been heard at least partly now.
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