Revenue dept officials brief FM on problem areas in tax code
New Delhi: Senior Revenue Department officials, including those retired, on Tuesday gave a presentation to the Finance Minister Pranab Mukherjee on the problem areas in the Draft Direct Taxes Code such as proposals on tax on savings and doing away with tax rebate on home loans.
The other problem areas in the draft Direct Taxes Code -- that will replace the age-old Income Tax Act--include the issues relating to the Minimum Alternate Tax (MAT) and taxation of foreign companies, sources said.
The meeting was also attended by members of the Central Board of Direct Taxes and other tax department officials.
The Draft Tax Code proposes to tax all savings schemes at the time of withdrawal by the subscriber, as against the current practice of exempting withdrawals in long-term saving schemes like Employees Provident Fund, General Provident Fund and Public Provident Fund.
However, the code is silent on the existing practice of giving tax rebate on housing loans, which many interpret as the proposal to do away with these tax concessions.
It also proposes imposing MAT on gross assets of the company rather than profits, and higher taxation on foreign companies.
Mukherjee had earlier given assurances that grievances related to the draft direct tax code would be addressed before a bill is tabled in Parliament.