Direct Tax Code likely to miss its April 2012 implementation deadline

In another blow to the Government, the Direct Tax Code is once again most likely to miss its already extended deadline of April 2012. It is now being expected to be implemented in April 2013 along with the proposed goods and services taxation (GST).

Direct Tax Code

The DTC that is meant to replace the 50 year old Income tax Act was introduced in the parliament last year and had to come into force in April this year. The Code’s deadline was then later extended to April 2012 since the draft Bill was referred to a Parliamentary standing committee. This committee was to present its report in the ongoing parliament session, but is now most likely to do so in the winter session. A senior finance ministry official stated that “there won’t be enough time. The Act needs to be passed by March 31 for implementation from April 1. If the standing committee report comes in the winter session, the final Bill can at best be tabled in Parliament in the Budget session and it would not be possible to announce the implementation from the next financial year in the Budget without the Act’s passage.” He added that ‘both the IT department and the industry should be given at least nine months to prepare themselves to handle the new framework.’

2 thoughts on “Direct Tax Code likely to miss its April 2012 implementation deadline

  1. Now, this latest News, seems to make sense; may be read in the light of >

    Reproduced below, is my comment sent: ” As per the wishful thinking of the FM .He hopes that the DTC Bill could be enacted and made effective from the 1st day of April 2012 (assessment year 2012-13).Should that,despite the seemingly remote possibility, be presumed to happen, then the DTC provisions should , undoubtedly, apply for the assessment year 2012-13 (and onwards). In other words, the exercise, comprising the computation of income and calculation of tax thereon, for the already running current year itself, would, for all purposes (i.e. including for estimation of income and payment of advance tax, TDS, etc.), be required to be made only in accordance with what the DTC , in terms, provides, either as at present or depending on how it is going to cover eventually, if and when enacted, all the relevant aspects.
    As of now, however, the DTC, in its present form and substance, even on the FM’s own admission, cannot be regarded to have been given its final shape; on the contrary, is still on the draftman’s board. Further, as per indications, one has no reason to take it for granted, much less presume, that the requisite Rules, Notifications, etc., as are found mentioned/envisaged in the Bill itself, would be in place before the DTC so comes into force.
    In this scenario, it might certainly not be prudent for anyone really concerned, not excluding the FM and his ministry, not to be guided by or keep in sharp focus the wisdom gathered , albeit in hindsight, from the enormous amount of controversies and litigation that ensued in the recent past – which is still raging,- n the aftermath of the mindless action of the government in proceeding with and enactment of a new section 14A, prematurely, without having in place, before hand, the Rules required for its proper implementation.
    For a critique on that subject, one may care look up the published article : (2009) 14 CPT 819.
    The foregoing comment is open to review, should a contrary view of the points aired as above, be forthcoming/ come to be heard from any quarters. ”

    (Of course, nothing was forthcoming or came to be heard- until the update since received through Taxworry)

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