{"id":1414,"date":"2012-03-09T15:54:11","date_gmt":"2012-03-09T15:54:11","guid":{"rendered":"http:\/\/www.itatonline.org\/info\/?p=1414"},"modified":"2012-03-09T15:59:09","modified_gmt":"2012-03-09T15:59:09","slug":"download-report-of-standing-committee-on-direct-tax-code-bill-2010","status":"publish","type":"post","link":"https:\/\/itatonline.org\/info\/download-report-of-standing-committee-on-direct-tax-code-bill-2010\/","title":{"rendered":"Download Report of Standing Committee on Direct Tax Code Bill 2010"},"content":{"rendered":"

Report of the Standing Committee on the Direct Taxes Code Bill 2010<\/strong><\/p>\n

The Standing Committee on Finance<\/strong> has submitted its 49th Report on the Direct Tax Code 2010<\/a><\/strong> to Parliament today, 9th March 2012. The Committee has noted that it has considered the suggestions of the Income Tax Appellate Tribunal Bar Association<\/em>.<\/p>\n

The salient points of the Report are the following:<\/p>\n

(i) On the aspect of whether professionals from related professions can be appointed Accountant members of the Tribunal, the Committee observed that the Ministry’s reasoning for non-inclusion of related professionals in the definition of Accountant Member was a very strict construction of the term and not acceptable. It suggested that the scope should be widened. <\/p>\n


\n(ii) It is noteworthy that on the issue as to whether a Chief Justice of the High Court should be appointed President of the Tribunal, the Committee does not appear to have expressed any reservation on this proposal. <\/p>\n

(iii) On transfer pricing, the Committee appreciated that the proposed transfer pricing regulations to determine “arm\u201fs length price” for international transactions have been specially intended as an anti-abuse measure to prevent tax evasion through transactions with notified non-cooperative jurisdictions or certain specified locations. It emphasized that hardship to tax payers should be avoided by excluding purely commercial transactions between unrelated parties from its purview. It also stated that a monetary threshold should be prescribed for granting exemption from these regulations to small and economically insignificant transactions. <\/p>\n

(iv) On GAAR, the Committee noted the apprehensions expressed by different stakeholders on the applicability of GAAR proposals and recommended that the Ministry and the CBDT should seek to bring greater clarity and preciseness to the scope of the provisions. There should be certainty on these provisions so that foreign investors do not become wary of investing in the country. It pointed out that the conditions dealing with “misuse or abuse of DTC provisions” and the “manner applied for the arrangements not for bona fide business purpose” and “lacks commercial substance”, being very widely worded and being subjective, need to be more specifically defined to avoid undue discretion to tax authorities. The Committee pointed out that the onus should rest on the tax authority invoking GAAR and this should not be shifted to the taxpayer. The Committee made specified certain aspects that neeeded to be carefully considered before finalizing the GAAR proposals. <\/p>\n

(v) The Committee has suggested raising the income tax exemption limit to Rs 3 lakh and also hiking deduction on savings to Rs 2.5 lakh.<\/p>\n

(vi) The Committee has suggested that the limit for total tax saving deductions, which include investment in provident fund, life insurance, children education and infrastructure bonds, be raised to Rs 2.5 lakh from Rs 1.2 lakh. At present, investments up to Rs 1 lakh in specified instruments are deducted while calculating the tax liability. In addition, investments up to Rs 20,000 in infrastructure bonds are also exempted from tax.<\/p>\n

(vii) The Committee has stated that the wealth tax ceiling should be substantially increased to Rs 5 crore from Rs 1 crore currently to reflect the current realities, and beyond that limit, tax should be payable on slabs basis.<\/p>\n

(viii) The Committee has suggested that the proposed 60 days stay for non-resident Indians to retain their non-residential status be relaxed and restored to the existing 182 days, subject to conditions.<\/p>\n

(ix) The Committee has recommend that the definition of \u201chouse property\u201f should be re-drafted so that the distinction between commercial and non-commercial property is clearly brought out.<\/p>\n

(x) No change in the 30 per cent tax rate on corporates proposed.<\/p>\n

(xi) The Committee has recommended that the ministry could explore the possibility of abolishing the Securities Transaction Tax (STT), while correspondingly calibrating the Capital Gains Tax regime \u2013 both short term and long term. Accordingly, the distinction between listed and unlisted securities should be removed. It should also be ensured that companies do not escape paying capital gains tax on the basis of Double Taxation Avoidance Agreements (DTAAs). A large number of foreign institutional investors invest through Mauritius to avoid paying tax on capital gains in India.<\/p>\n

\n

\"\"  Download Report of Standing Committee on Direct Tax Code Bill 2010<\/a><\/strong> (1.7 MiB, 6,422 hits)<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Standing Committee on Finance<\/strong> has submitted its 49th Report on the Direct Tax Code 2010<\/a><\/strong> to Parliament today, 9th March 2012. The Committee has noted that it has considered the suggestions of the Income Tax Appellate Tribunal Bar Association<\/em>.<\/p>\n

Read more ›<\/a><\/div>\n

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