Finance Minister Pranab Mukherjee today asserted that the revised draft direct tax code was not a throwback to the days of exemptions, saying it only addressed the areas of concerns expressed by people.
"What is progressive? What is populist? Who are to judge over it? People expressed their concern. Those concerns have been addressed and the revised draft has been placed before the people," Mukherjee told PTI in an interview, rejecting the criticism following dropping of proposals to tax retirement benefits contained in the original draft.
He was responding to a query on the criticism that the revised DTC, which would replace the archaic Income Tax Act, 1961, was a throwback to the days of tax exemptions and that the government had developed cold feet on reforms to toe a populist line.
"If somebody assumes that the indicative rates in the direct tax hood is the final rate; it is for them to come to the conclusion, that is far from reality. What rate of taxes will be there only Parliament can decide. Nobody else," he said.
Stating that stakeholders had been asked to give their comments by June 30 on the revised draft, he said: "But again this is the draft. Therefore, you cannot presume that this progressive, this is regressive.
"This is nothing but the indicative rates, final rates will be determined by Parliament as is the Constitutional approach," Mukherjee said.
Contrary to the proposal to tax retirement benefits like PF and pension at the time of withdrawal contained in the first draft, the revised document unveiled earlier this month withdrew these taxation proposals, as also reversed the earlier move to levt Minimum Alternate Tax from corporate based on gross assets.
Also, it retained the exemption granted towards interest paid on housing loans, but did not mention the liberalised tax slabs contained in the first draft.
On the issue of tax slabs, Revenue Secretary Sunil Mitra said the rates in the first draft, which suggested 10 per cent tax on income from Rs 1.60-10 lakhs and 20 per cent on income between Rs 10-25 lakhs and 30 per cent beyond that, were illustrative.
"That's why every year Finance Minister states before Parliament and seek the approval that this will be the rate of taxes. So what is progressive, what is populist, who are to judge over it ... This is the draft. Therefore, you cannot presume that this is progressive, this is regressive," Mukherjee said.
Mukherjee said that the new draft addresses 11 grievances expressed by stakeholders to the proposals in the first discussion paper.
Mukherjee had promised in his Budget speech to implement the new direct tax laws from next fiscal.
