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Sub theme:-Any other related issues concerning the thrust area
of the seminar.
Title of the paper: - Probable effect of DTC on Small Scale
industries.
SYED ZAHID PERWAIZ
Research scholar kolhan university
Contact: - 9031262505/9835355367
Email: - [email protected]
Abstract:-
The direct tax code aims at a comprehensive reform in the sphere
of personal and
corporate taxation. An attempt has been made in this paper to
discuss the impact of
the code on common people and small scale industries. To safe
guard the interest
of business, industry and workmen there are number of chambers
of commerce and
Trade Unions but for common self employed people and retired
people there are
none. The Code is yet debated and recommendations need to be
sent to finance
Ministry. There is a great difference between" Code" and the
"ACT". The
government is trying to bring in Direct Tax Code" instead of
present system of
"Tax under Finance Act. Once tax act is converted into a code it
would generally
not be necessary to introduce changes every year along with
budget. This is a
reform which the government wants to bring in for the benefit of
the people. Thecode has proposed no change in the exemption limit
of the personal tax. It remains
Rs 1,60000 for men, Rs 1,90,000 for women and Rs 2,40,000 for
senior citizen.
Yet percentage of taxation has been reduced up to income of Rs.
Ten lakh. Prima
facie, the tax liability will reduce significantly as the draft
code proposes to tax
incomes up to Rs 10 lakh at 10%, that between Rs 10 lakh and Rs
25 lakh at 20%
and sum in excess of that at 30%. Now people pay 10% tax only if
his income is
less than Rs 3 lakh. A person drawing Rs 10 lakh now pays Rs
2.11 lakh as tax. If
Code is implemented he would pay tax amounting to Rs 84,000/-
only. Is it notreally good? But all deduction now under 80 c will
vanish as it is available now
except for a few like new pension schemes, LIC etc! This means
death nails on
small saving schemes. However deduction under 80 C will be
enhanced from Rs
1 lakh to Three lakh. This allowance would surely help
generation next. But the
exemption on retirement benefits would vanish. Young people will
not get tax
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benefit. On implementation of the code all perks would
considered part of the
gross salary for the purpose of taxation. The impact of that on
tax liability of an
individual will be known only when the rules are prescribed by
the income-tax
department at a later date.
Under a presumptive taxation regime, small and medium
indudtriescan opt for a
flat tax on their turnover instead of paying taxes based on a
detailed assessment as
per the tax laws. The new code has proposed to enhance the limit
for availing
presumptive taxation option to businesses with a turnover of up
to Rs 1 crore from
the present Rs 40 lakh. Under the new direct tax code, any
business having a
turnover of up to Rs 1 corer can pay tax at the rate of 8% of
the total turnover or
gross receipts.Businesses that opt for a presumptive tax regime
are not required to
maintain the books of accounts, thereby bringing down their cost
of compliance
significantly.Moreover, they can pay their entire tax liability
at the time of filing
their returns, that is, they do not have to pay periodic advance
taxes.With a higher
limit, more businesses can take the advantage of this regime.
However,
professionals such as chartered accountants will not be eligible
for this regime.
References:-
Shetty, S.L. (2010), Mare Tax Concessions for More Inequality,
Economic & Political Weekly,2010 XLV (11).,March 13
Rao, M., Rao, G. and Rao, K. R. (2009), Direct Taxes Code : Need
for Greater Reflection,
Economic & Political Weekly, XLIV( 37), September
Rao, K. R. and Chakraborty, P. (2010), Goods and Services Tax in
India : An Assessment of the
Base, Economic & Political Weekly, XLV (1), January 2
URL visited
http://finmin.nic.in/DT code/Revised Discussion Paper.pdf
http://www.jagoinvestor.com/2010/05/impact-on-direct-tax-code-on-various
products.html
http://economictimes.indiatimes.com/quickarticles
show/5578251.cms
http://www.forbes.com/fdc/2010/01/18/forbesindia-investment-guide-direct-tax-code
.
http://finmin.nic.in/DT%20code/Revised%20Discussion%20Paper.pdfhttp://www.jagoinvestor.com/2010/05/impact-on-direct-tax-code-on-various%20products.htmlhttp://economictimes.indiatimes.com/quickarticles%20show/5578251.cmhttp://www.forbes.com/fdc/2010/01/18/forbeshttp://finmin.nic.in/DT%20code/Revised%20Discussion%20Paper.pdfhttp://www.jagoinvestor.com/2010/05/impact-on-direct-tax-code-on-various%20products.htmlhttp://economictimes.indiatimes.com/quickarticles%20show/5578251.cmhttp://www.forbes.com/fdc/2010/01/18/forbes
