Finance Minister Mr Pranab Mukherjee introduced DTC in the Parliament today. If it passes through, the existing 1961 Income tax act will be replaced by the new act. There are a number of proposed changes in the DTC, complete details of which are not known at. The new code will come into act from FY 2012 – 2013 that is assessment year 2013-2014 as opposed to the earlier understanding of FY 2011 -2012.
According to the discussion paper available on Finance Ministry’s website, the below are a few details of the proposed bill.
As discussed earlier there would be a change to the existing income tax slabs. Dividend Distribution Tax (DDT) is introduced at a rate of 15%. Now you will need to be cautious while selecting dividend re-invest option of mutual funds over growth option. However, for holding companies DDT has been removed. Tax deductions on investments have been proposed to change
from EEE to EET i.e. the final redemptions will now attract a tax, while investments and accruals will continue to be tax-free.
There is no change to the STT (Securities Transaction Tax). While the long term capital gains arising out of investments in stock markets will continue to be tax-free but the definition of long term has been changed from 1 year to 1 year from the start of the economic year. Cess and surcharge have been removed. From Corporates point of view, SEZs will enjoy profit linked tax deductionns.
Revenue Secretary Sunil Mitra said that DTC would cost the government a revenue loss of Rs 53,172 crore.
ADVERTISEMENTS 
Sathish Emmadi
Sathish Emmadi is a co-founder & editor at Lastbull.com. He is presently working in IT for one of the world’s top mutual fund companies. Handled multiple projects in BFSI (Banking,Financial Services and Insurance) domain. An Engineering Graduate from NITW.
Related posts:
Loading ...