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Finance Minister Pranab Mukherjee has mentioned that the new direct tax regime will be effective from 2011. This will offer rationalised rates and simplified procedures to people. Stakeholders can still express their views for finalising the proposal.
"We want to present all stakeholders with a tax regime that is simple and broad based, leading to lowering of tax rates, much better tax compliance and reduced litigation," told Mukherjee, during a new Direct Tax Code seminar held in New Delhi.
The seven vital areas which have been identified the government for detailed probing includes:
- The concept of minimum alternative tax based on gross assets
- Capital gains tax in the case of non-residents
- Income Tax Act and double taxation avoidance pacts with other nations
- Rules that seeks to curb aggressive tax avoidance
- Taxation of foreign companies in India
- Taxation of charitable organisations
- Tax on maturity amount of investments where interest is tax-exempt
He mentioned that government is working towards blending the best practices existing across the world and innovative methods, which can be used for developing the new tax code.
"The new system will also take into account established and time tested practices which have withstood judicial scrutiny," the finance minister added.
