DIRECT TAX CODE: THE METAMORPHOSIS (With special reference to the Income Tax Statute)

Abstract

Legislations governing Direct Tax are the imperative statutes. The subject, taxes governing Indian Economy needs overhauling and removal of deadwoods. The statute which has undoubtedly resulted always as the major source of Indian revenue is expected to undertake what may be called as the periodic spring-cleaning of the corpus of its statute law (Taxes comprises of more than 50% of aggregate revenue and the Direct Taxes contribute more than 1/5th to it). The law that got enacted more than five decades in past (i.e. in 1961) needs to get loaded with contemporary provisions, improvising and justifying its existence and functions as well.

Hopefully, in next couple of years India may come-up with vital reformatory actions where Direct Taxation Laws and even Indirect Taxation Laws may get their new dimensions in the form of Direct Tax Code (DTC) and Goods & Service Tax (GST) respectively. An initiative to bring the reform especially in direct taxation Statutes began half a decade earlier (Direct Tax Code 2009) but the merry-go-around temperament is still not making its enactment possible.

Political scenario and proclamations, as initiated by the UPA regime, the Direct Taxes Code Bill 2010 sought to usher in a new income tax code for the country. Also, while presenting the maiden budget of the BJP-led NDA government, Finance Minister Arun Jaitley has given encouraging signals of reviving and bringing the revised Direct Taxes Code (DTC) soon.