The finance ministry has almost doubled the strength of its revenue officials working on the Direct Taxes Code, as it is running against time to present the Bill in the monsoon session of Parliament. The government has posted seven commissioners and joint commissioners of income tax as Officers on Special Duty (OSD) in Tax Policy Legislation (TPL), a division of the Central Board of Direct Taxes (CBDT).
The finance ministry has set up a task force to draft the Bill. These officials, to be part of the task force, will work with the existing 10 officials of TPL to speed up the process of drafting the code so that it can be put up for public discussion before its introduction in Parliament. Currently TPL has only two joint secretaries, four directors and four under-secretaries.
“As the officers in TPL are dealing with various issues other than the Direct Taxes Code, the government has deputed more officials to work on the Bill. We have been told to finalise the Bill before the monsoon session of Parliament, and we are working with that deadline in mind,” said a finance ministry official, who did not wish to be identified.
With the addition of seven officials in two rounds (three in first round and four in the second), it has now 17 officials to finalise the architecture of the code. The newly deputed officials are busy giving shape to the Direct Tax Bill.
“If the government decides to put the second draft in the public domain, we will have to finalise the Bill accordingly,” the official said, adding that apart from the nine areas identified by Finance Minister Pranab Mukherjee, the taskforce was looking at various parts of the draft code.
Mukherjee has assured the industry that the government is open to re-examining the proposals relating to the Minimum Alternate Tax (MAT), capital gains tax, Double Taxation Avoidance Agreement (DTAA), general anti-avoidance rule, taxation of charitable organisations and foreign companies in India, exempt-exempt-tax regime, deductions in case of retirement benefits and income from house property.
The government is planning to implement the Direct Taxes Code in April 2011. It will replace the Income Tax Act 1961. The finance ministry will have to get the Bill vetted by the law ministry before it takes it to Parliament.