NEW DELHI: In a major relief to the middle class, the Centre has proposed to drop earlier suggestions of taxing withdrawals from provident funds, pension funds and pure life insurance schemes and of imposing tax on retirement and service perks given by employers.
The revisions in the Direct Tax Code (DTC), originally proposed in August 2009, also clarified that the tax exemption on interest up to Rs 1.5 lakh per annum on housing loans will continue. In a major concession to industry, the proposal to impose minimum alternate tax (MAT) on gross assets of a company was also shelved. MAT will continue to be applied on book profits as at present.
Another significant change is in the manner in which long-term capital gains on assets held for over a year will be treated. In the case of listed securities, where there is now no long-term capital gains tax, the proposal is that a proportion of the gain in the value of the securities will be added to the person’s income, with the proportion declining as the period of investment increases.
Revenue secretary Sunil Mitra said the government would entertain suggestions on the revised DTC draft till June 30. A Bill will be brought before Parliament in the monsoon session. Once passed by Parliament, the new tax code will replace the 1961 Income Tax Act and be implemented from April 1, 2011.
Under the revised DTC, retirement benefits, subject to specified limits, will be exempt unlike in the earlier version. These include gratuity, amounts received under VRS, commutation of pension linked to gratuity received or from encashment of leave at the time of retirement.
TOI
The revisions in the Direct Tax Code (DTC), originally proposed in August 2009, also clarified that the tax exemption on interest up to Rs 1.5 lakh per annum on housing loans will continue. In a major concession to industry, the proposal to impose minimum alternate tax (MAT) on gross assets of a company was also shelved. MAT will continue to be applied on book profits as at present.
Another significant change is in the manner in which long-term capital gains on assets held for over a year will be treated. In the case of listed securities, where there is now no long-term capital gains tax, the proposal is that a proportion of the gain in the value of the securities will be added to the person’s income, with the proportion declining as the period of investment increases.
Revenue secretary Sunil Mitra said the government would entertain suggestions on the revised DTC draft till June 30. A Bill will be brought before Parliament in the monsoon session. Once passed by Parliament, the new tax code will replace the 1961 Income Tax Act and be implemented from April 1, 2011.
Under the revised DTC, retirement benefits, subject to specified limits, will be exempt unlike in the earlier version. These include gratuity, amounts received under VRS, commutation of pension linked to gratuity received or from encashment of leave at the time of retirement.
TOI
No comments:
Post a Comment