Direct Tax Code


Direct tax is the tax which is charged directly on the tax payer. For e.g. property tax and income tax. In other words direct tax is that tax that is deducted from one's salary.Direct Taxation in India Direct taxation in India is taken care by the Central Board of Direct Taxes (CBDT); it is a division of Department of revenue under Ministry of Finance. CBDT is governed by the revenue act 1963.CBDT is given the authority to create and control direct taxes in India. The most important function of CBDT is to manage direct tax law followed by Income Tax department.In India the tax structure is divided amongst the central government and state government. The central government levies taxes on income, custom duties, central excise and service tax. While the state government levies tax like state excise, stamp duty, VAT (Value Added Tax), land revenue and professional tax.Local civic bodies levy tax on properties, octroi etc.Capital gains tax, personal income tax, tax on corporate income and tax incentives all come under the purview of direct tax.Direct taxes are charged on the basis of residential status and not on the basis of citizenship. The assessee are charged based upon the following factors Resident
Resident but not ordinary resident.
Nonresident.
Direct Taxes Before ReformThey had a major impact on economic policies, creation of savings and the trend of investment. There was no proportion in terms of the impact of direct taxes on the economy and there relative share in total tax revenues. The system of direct taxes was very much complex and inefficient because of the combination of high marginal rates of personal income and wealth taxation and high rates of corporate profits. The corporate tax was pretty high. It leads to large scale evasion. Members Of Parliament and Central Government Ministers get comparatively low salaries, but they are given a sitting allowance which is not taxable. Ministers, MP's and other high ranking government officials get government allocated accommodation, where the charges are pretty less in comparison to the prevailing market rate.Growth in Direct Tax collection during the Financial Year 2008-09 Net direct tax collection during the fiscal 2008-09 stands at Rs.338, 212 crore, up from Rs.312, 202 crore during 2007-08, registering a growth of 8.33 percent. Growth in Corporate Taxes was 10.84 per cent, while Personal Income Tax (including FBT, STT and BCTT) grew at 9.09%. Despite economic slow-down and substantial relief to non-corporate taxpayers, direct tax collections exceeded the previous year's collection by about Rs.26, 000 crore.Growth In Direct Tax Collection During The Financial Year 2009-2010The net direct tax collections grew by 5.77 per cent during the first two months of the current fiscal (2009-2010).It was Rs 24,158 crore compared to Rs 22,840 crore at the same time last year. Corporate tax grew at5.56 per cent (Rs 8578 crore against Rs 8126 crore), while personal income tax (including FBT, STT and BCTT) grew at 5.92 per cent (Rs 15,559 crore as against Rs 14,690 crore0.Overall refund outgo during the period increased by 26.19 per cent (Rs 11,375 crore as against Rs 9014 crore)while refunds to non corporate taxpayers grew by 61.7 per cent (Rs 2,149 crore against Rs 1,329 crore).

Comments

  1. Encouraging more multi national companies is to promote? Privatization , , globalisation, , liberalization...

    ReplyDelete

Post a Comment