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Recently, the Finance Minister has released the Direct Taxes Code, 2013 (DTC 2013) for public discussion/comments. The first version of DTC was introduced in August 2009 when Government unveiled the DTC along with a discussion paper to replace the Income-tax Act, 1961 (the Act) and the Wealth Tax Act, 1957. In June 2010, the Government released the revised discussion paper incorporating several changes to address concerns over some major issues arising therefrom.
In August 2010, the Government tabled a revised version in the form of DTC 2010 in the Lok Sabha which was then referred to the Standing Committee on Finance (SCF) for its review and comments. The Standing Committee after deliberating with the recommendation given by various stakeholders submitted their report to the Parliament on 9 March 2012.
Thereafter, in September 2012, Kelkar Committee in its report on ‘Road Map for Fiscal Consolidation’ suggested a comprehensive review of DTC. Hence, Government decided to revise the DTC after considering suggestions given by SCF and present the revised version in the parliament.
As per news reports, out of 190 recommendations made by SCF, 153 are proposed to be accepted wholly or in part. Some of the key recommendations accepted include exemption to taxation of income from indirect transfer for shareholders having small shareholdings (upto 5 per cent), modification in definition of place of effective management, broad based General Anti-avoidance Rules, etc.