Sudhanva Shetty Shetty
Writer, coffee-addict, likes folk music & long walks in the rain. Firmly believes that there's nothing more important in a democracy than a well-informed electorate.
India’s income tax laws are codified under the Income-tax Act of 1961. This Act has been amended several times since its inception. While its relevance is indisputable, there have been calls to replace it with a consolidated legislation which will unify all direct tax laws in India and simplify the structure of the same. The culmination of these demands is the Direct Tax Code.
What is the Direct Tax Code?
The Direct Tax Code (DTC) aims to simplify, revise, consolidate and streamline the structure of direct tax laws into a single legislation. The DTC, if implemented, will replace the Income-tax Act of 1961 and all other direct tax legislations.
History of the Direct Tax Code:
The DTC was first drafted in 2009 and introduced in Parliament in August 2010 by then Minister of Finance Pranab Mukherjee. Subsequently, a standing committee was appointed to analyse and advice on the Code. It was initially proposed to be effective from April 2012 before being deferred. It was modified and introduced again in 2013 but has not been implemented yet.
Salient features of the Direct Tax Code:
Current status of the Direct Tax Code:
Incumbent Minister of Finance Arun Jaitley noted that many of the provisions of the DTC have already been integrated as amendments to the existing tax law, and said the DTC would most likely be buried. However, many aspects of the original DTC are not present in the Income-tax Act of 1961. There are economists who argue that India’s current tax code is too complicated and needs a complete make-over rather than a few minor amendments. For them, the Direct Tax Code is the answer.
Thank you for subscribing.
We have sent you a confirmation email.