DIRECT TAX CODE

PRESENTED BY:
MOHAMMED NADEEM
 OVERVIEW
 Introduction
 Types of tax
 Direct tax code
 Features
 Issues and analysis
 Conclusion
 INTRODUCTION
 A fee charged by a government on a
product, income or activity.
 Taxes in India are levied by the Central
Government and the State Governments.
 The authority to levy a tax is derived
from the Constitution of India.
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 No tax shall be levied or collected except by
the authority of law.
 Passed either by the Parliament or the State
Legislature.
 The CBDT provides essential inputs for
policy and planning of direct taxes in India.
 Purpose
 Revenue generation
 Redistribution of money
 Repricing
 Representation
 Types of tax

Tax

Direct taxes Indirect taxes

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 Direct tax  means a tax paid directly to the
government by the persons on whom it is
imposed.
 Example
Corporate Income taxes

Personal Income Tax

Capital Gains Tax

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 Indirect tax means a tax that increases the
price of a good so that consumers are actually
paying the tax by paying more for the products.
 Example
 Excise Duty

 Customs Duty

 Service Tax
 The direct tax code
 The government introduced the landmark
Bill, The Direct Taxes Code Bill in 2009.
 It will impact investments, borrowings, and
expenses.
 The Direct Taxes Code (DTC) is said to
replace the existing Indian Income Tax Act,
1961.
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 The Bill widens income tax slabs for individuals.
 The Bill removes several tax deductions currently
allowed such as those on investments in life
insurance or provident funds.
 The Bill raises the wealth tax exemption limit
 Highlights of the Direct Taxes Code

 Income tax exemption limit proposed at Rs. 2

lakh per annum, up from Rs. 1.6 lakh.
 10 per cent tax on annual income between Rs.
2-5 lakh, 20 per cent on between Rs. 5-10 lakh,
30 per cent for above Rs. 10 lakh.
 Tax burden at highest level will come down by
Rs. 41,040 annually
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 Proposal to raise tax exemption for senior
citizens to Rs. 2.5 lakh from Rs. 2.4 lakh
currently
 Corporate tax to remain at 30 per cent but
without surcharge and cess
 MAT to be 20 per cent of book profit, up from
18.5 per cent
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 Proposal to levy dividend distribution tax at 15 per
cent
 Exemption for investment in approved funds and
insurance schemes proposed at Rs. 1.5 lakh
annually, against Rs. 1.2 lakh currently
 Proposed bill has 319 sections and 22 schedules
against 298 sections and 14 schedules in existing IT
Act
 Features

 Single Code for direct taxes.

 Use of simple language.

 Reducing the scope for litigation.

 Flexibility.
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 Consolidation of provisions.
 Providing stability.
 Elimination of regulatory functions.
 Ensure that the law can be reflected in
a Form.
Key issues and analysis
  It is not possible to assess the net impact on
government revenues of the new tax
proposals in the Code.
 The Bill lowers the tax rate for those who
earn between Rs 3 lakh and Rs 25 lakh, as
compared with the Act.
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 Under the Bill, companies will be charged a
minimum alternate tax on their assets, rather than
profits as is currently the case.
 The Bill removes a range of tax incentives allowed
to companies under the Act, such as those for
investments in backward areas and exports, as
these could distort investment decisions.
Conclusion
"It was only for the good of his subjects
that he collected taxes from them, just
as the Sun draws moisture from the
Earth to give it back a thousand fold“
 
    Kalidas in Raghuvansh eulogizing
KING DALIP.
THANK
YOU!!!
QUESTIONS???