Mumbai: The Direct Taxes Code (DTC) Bill, which aims to overhaul the over 50-year-old I-T Act, is almost ready and will be taken up in the Monsoon session of Parliament, Finance Minister P Chidambaram said on Friday. "I am just writing the Direct Taxes Code. We will introduce it in the Monsoon session. We have another week's work on that," he said.
The Finance Minister was in Mumbai to attend the Silver Jubilee celebrations of market regulator SEBI.
The DTC Bill was introduced in Parliament in 2010 and was referred to the Standing Committee on Finance headed by senior BJP leader Yashwant Sinha.
Among other things, the Committee had suggested raising the income tax exemption limit to Rs 3 lakh as against Rs 2 lakh proposed in the original DTC Bill. On corporate tax, it recommended that the rate be retained at 30 per cent.
The Income Tax Act was enacted in 1961. Responding to a suggestion on the need for a simple tax laws, Chidambaram said: "I dont know what a simple tax code is. The point is a tax code cannot be written in five pages. A tax code will run into few hundred pages...I don't think you can write a simple tax code."
He said India's Income Tax Act or all the pages related to direct taxes is only a fraction when compared the number of pages that are there in the United States. Referring to his recent meeting with OECD members, he said the member-countries had asked a team to work on 'base erosion and profit sharing'.
"Why? Because we find every company, almost every company is finding innovative ways for not to pay tax, not to pay tax in the source country, not to pay tax in the resident country. If companies don't pay tax, how the government raise revenues?," he said.
Chidambaram further said in advanced economies, Parliamentary committees admonishing multi-national companies and "in developing countries, we find multi-national companies admonishing governments".