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.
source: Indian Express
