The government said on Friday a discussion paper on Direct Tax Code, which seeks to simplify the tax laws, will be released by August 20.
"The preparation of a simplified new income tax law is in progress. The new Direct Tax Code will be released along with the discussion paper by August 20," minister of state for finance S S Palanimanickam told the Lok Sabha in a written reply.
While presenting the Union Budget for 2009-10, finance minister Pranab Mukherjee had said that in order to bring in tax reforms in the country the government will bring the new DTC within 45 days.
"The Direct Tax Code, along with a discussion paper, will be released to the public for debate. Based on the inputs received, the government will finalise the Direct Tax Code Bill for introduction," the finance minister had said.
The code will replace the existing Income Tax Act, which was enacted in 1961 and would subsume the direct tax legislations.
The Income Tax code is expected to reduce the plethora of exemptions given to various segments of tax payers.
Talking about the proposed tax code, former finance minister P Chidambaram had said that the marginal rate of taxation, including education cess, stood at 33.99 per cent.
"My endeavour has been to increase the effective rate of corporate tax paid by corporations but I confess my efforts are not entirely successful because of the demands for continuing exemptions or introducing new exemptions," he had said.
The Economic Survey had also suggested that the new simplified law should be put in place to replace the over four-decade old Income Tax Act and streamline the direct taxations structure.
"Introduction of the new Income Tax Code that results in natural corporate tax regime (is needed)," Economic Survey had said.
