IT department revises Direct Tax Code draft bill
The Income Tax (IT) department has recently revised the draft of the Direct Taxes Code (DTC) Bill. The new version, which was published on the Income Tax department website for comments from the stakeholders on 8 April 2014, is aimed at widening the tax net, removing ambiguities and plugging loopholes in the current tax laws.
“Broadly, the revised draft of DTC is a step further in the effort of Ministry of Finance (MoF) to bring out a comprehensive tax legislation. But certain measures still need to be considered before introducing the DTC Bill in Parliament for discussion. With the enactment of Companies Act, 2013, expenditure on Corporate Social Responsibility (CSR) is now a mandate for the corporates. It is disappointing to note that, no specific provisions have been incorporated in the revised DTC draft regarding the deductibility of such expenditure, despite the recommendation by the Standing Committee on Finance (SCF) to allow deduction for such expenditure to encourage CSR activities in backward regions. In case there is no clarity on possibility of expenditure on CSR activities, the inherent conflict between two statutes would create a disarray amongst corporates.”