India’s New Tax Rules Delayed Again
August 30, 2012 Taxation in India
NEW DELHI – India is facing another delay to the implementation of its long debated Direct Tax Code, as the Finance Ministry looks at revising the proposed rules.
At a press conference held in New Delhi following a meeting of the Central Board of Excise and Customs, the Finance Minister of India Chidambaram Palaniappan revealed that the government may not be able to implement the proposed Direct Tax Code (DTC) by April 2013, as is currently scheduled.
The Minister explained that since the DTC was first proposed it has undergone numerous revisions and updates, and now “…it requires a fresh look”.
The DTC is intended to replace the Income Tax Act 1961, and would raise tax thresholds and lower tax rates on personal incomes, and would also introduce several changes to taxation of businesses, aimed at improving the effectiveness and efficiency of the tax system while boosting economic activity.
The DTC was originally drafted in 2008, and was introduced to parliament in 2010, but immediately faced heavy controversy and debate.
When asked whether the delay to the DTC will affect the government’s plan to implement its proposed General Anti Avoidance Rules (GAAR) by April 2013, the Minister said that a review is currently being conducted on the GAAR and no time estimates can be made until it is completed.
While the review on the DTC and GAAR is being conducted, the government will continue its efforts to improve tax compliance in the country.
Photo by Alan Cleaver