New direct tax code draft soon, says Pranab

Finance minister Pranab Mukherjee said on Wednesday that the government would soon come out with the new draft of the direct taxes code (DTC) after incorporating changes based on feedback from corporates and individuals on the earlier draft.

Mukherjee told members of the Confederation of Indian Industry (CII) that this would be the "semi-final draft" since he would still be open to suggestions from them before he presents the final draft to Parliament for approval.

Central Board of Direct Taxes (CBDT) chairman S S N Moorthy too said yesterday the draft would come out for public debate in next two months.

The first draft of the DTC was made available in August last year. Industry had, however, protested certain proposed taxes in the DTC. The draft suggested 2 per cent minimum alternate tax (MAT) on the gross asset value of a company, instead of the current levy of 15 per cent on book profits.

Moorthy said the government is looking into the MAT issue. "All the issues raised by industry and other representatives are under consideration and addressed in the revised draft," the CBDT chief said.

The new DTC aims at radical reforms of direct taxes and simplification of the tax structure. Once approved, it will replace the Income Tax (I-T) Act of 1961 and other related laws. It is slated to be introduced in April 2011.