Budget 2015: Government drops DTC, sees no merit in going ahead with new law
The DTC was first mooted in 2008 to overhaul the five-decade-old Income Tax Act to facilitate voluntary tax compliance and reducing litigations.
By PTI | Updated:
NEW DELHI: The previous UPA government's pet Direct Taxes Code (DTC) has been dumped by Finance Minister Arun Jaitley, saying there is no merit in implementing the Code that was first introduced seven years back.
The DTC was first mooted in 2008 to overhaul the five-decade-old Income Tax Act to facilitate voluntary tax compliance and reducing litigations.
"There is no great merit in going ahead with the Direct Taxes Code as it exists today," said Jaitley while presenting the Budget for 2015-16.
The DTC, which was conceived by former Finance Minister P Chidambaram, has been pending for over seven years now. The Bill was vetted by the Standing Committee following which the UPA government brought out a revised draft of the DTC Bill in April last year.
The revised draft had put the income tax exemption limit at Rs 2 lakh and introduced a fourth slab of 35 per cent tax on super-rich with income exceeding Rs 10 crore.
Jaitley said enactment of a DTC has been under discussion for quite some time.
"Most of the provisions of the DTC have already been included in the Income Tax Act. Among the very few aspects of DTC which were left out, we have addressed some of the issues in the present Budget," he added.
The DTC was first mooted in 2008 to overhaul the five-decade-old Income Tax Act to facilitate voluntary tax compliance and reducing litigations.
"There is no great merit in going ahead with the Direct Taxes Code as it exists today," said Jaitley while presenting the Budget for 2015-16.
The DTC, which was conceived by former Finance Minister P Chidambaram, has been pending for over seven years now. The Bill was vetted by the Standing Committee following which the UPA government brought out a revised draft of the DTC Bill in April last year.
The revised draft had put the income tax exemption limit at Rs 2 lakh and introduced a fourth slab of 35 per cent tax on super-rich with income exceeding Rs 10 crore.
Jaitley said enactment of a DTC has been under discussion for quite some time.
ADVERTISEMENT
"Most of the provisions of the DTC have already been included in the Income Tax Act. Among the very few aspects of DTC which were left out, we have addressed some of the issues in the present Budget," he added.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The limit of reduction of health insurance premium was enhanced from Rs 15,000 to Rs 25,000. For senior citizens this limit has been increased from Rs 20,000 to Rs 30,000.
"For senior citizen above the age of 80 years, not eligible to take health insurance, deduction is allowed for Rs 30,000 toward medical expenditure. Deduction limit of Rs 60,000 on expenditure on account of specified diseases is enhanced to Rs 80,000 in the case of senior citizens," Jaitley said.
Additional deduction of Rs 25,000 is allowed for differently-abled persons, increasing the limit from Rs 50,000 to Rs 75,000. It is also proposed to increase the limit of deduction from Rs 1 lakh to Rs 1.25 lakh in case of severe disability.
Jaitley also proposed to provide that investment in Sukanya Samriddhi Scheme will be eligible for deduction under section 80C of the income-tax and any payment from the scheme shall not be liable to tax.
Limit on deduction on account of contribution to a pension fund and the new pension scheme is proposed to be increased from Rs 1 lakh to Rs 1.5 lakh.
Additional deduction of Rs 50,000 will be allowed for contribution to the new pension scheme u/s 80 CCD increasing from Rs 1 lakh to Rs 1.5 lakh.
"For senior citizen above the age of 80 years, not eligible to take health insurance, deduction is allowed for Rs 30,000 toward medical expenditure. Deduction limit of Rs 60,000 on expenditure on account of specified diseases is enhanced to Rs 80,000 in the case of senior citizens," Jaitley said.
Additional deduction of Rs 25,000 is allowed for differently-abled persons, increasing the limit from Rs 50,000 to Rs 75,000. It is also proposed to increase the limit of deduction from Rs 1 lakh to Rs 1.25 lakh in case of severe disability.
Jaitley also proposed to provide that investment in Sukanya Samriddhi Scheme will be eligible for deduction under section 80C of the income-tax and any payment from the scheme shall not be liable to tax.
Limit on deduction on account of contribution to a pension fund and the new pension scheme is proposed to be increased from Rs 1 lakh to Rs 1.5 lakh.
Additional deduction of Rs 50,000 will be allowed for contribution to the new pension scheme u/s 80 CCD increasing from Rs 1 lakh to Rs 1.5 lakh.
ADVERTISEMENT
