The wait for the much-hyped DTC Bill, which seeks to overhaul the over 50-year old income tax law, is likely to get longer. CNBC -TV18 learns from government sources that Prime Minister Manmohan Singh, for the time being, has put an end to the hope of Direct Taxes Code getting approved.
The Cabinet was supposed to consider on Thursday the DTC Bill with minor rejigs in the draft, including in the income-tax slabs. However, a top government official has told the channel that the prime minister has directed otherwise.
The DTC Bill, which aims to rationalise tax rates to bring more people and companies under the tax net, was introduced in Parliament in 2010. The negative feedback to some DTC proposals has led to the rethinking of the bill. Sources say the DTC Bill, 2003 could go back to the drawing board again.
Also, no fresh date has been set for the DTC consideration by the Cabinet. Finance Minister P Chidambaram had earlier said he intends to bring the DTC Bill in the Monsoon session of Parliament, following submission of the Standing Committee's recommendations. The ongoing Monsoon session is scheduled to end on August 30.
The first draft prepared by Chidambaram in 2009 had proposed an income-tax slabs of Rs 1.6-10 lakh, Rs 10-25 lakh and Rs 25 lakh and above. Besides, corporate tax was proposed at 25 percent.
The exemption limit at Rs 2 lakh for individual tax payers is unlikely to be touched, but CNBC-TV18 had reported that a new slab of 35 percent may be introduced for the super-rich.
The higher tax rate of 35 percent and wider wealth tax was causing concern, the official says adding, "the economic conditions are not conducive to tax proposals of this sort".
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