New Delhi, May 15: Finance minister Pranab Mukherjee today said the Direct Taxes Code (DTC) bill, which includes provisions on General Anti-Avoidance Rules (GAAR), will be introduced in the monsoon session of Parliament.
“After the budget session is over, I will have the opportunity to go through all the recommendations (of the Parliamentary Standing Committee on Finance)... After the Cabinet okays it, we can bring the DTC bill in Parliament during the monsoon session for the approval of both the Houses,” Mukherjee said while placing the Finance Bill, 2012 in the upper House today.
“At that stage (introduction of the bill) many of the recommendations of the standing committee will be accepted,” he added.
The bill if passed by Parliament would become law next year.
Aimed at simplifying regulations, the tax code proposes to increase exemption slabs and tougher provisions against black money.
The standing committee has recommended raising the tax exemption limit to Rs 3 lakh from Rs 1.8 lakh.
Besides, the investment limit for tax savings schemes has been fixed at Rs 3.20 lakh and wealth tax limit proposed at Rs 5 crore.
With general elections due in another two years, the Congress may find it beneficial to accept the revised exemption limit.
During his budget reply in the Lok Sabha last week, the finance minister deferred the introduction of GAAR by a year. There was widespread apprehension that GAAR would be used to tax foreign institutional investment from tax havens, leading to FIIs pulling over Rs 11,000 crore out of the stock markets last month.
North Block had said it would come up with a revised version in line with the recommendations made by the parliamentary committee and stakeholders such as banks and FIIs.
The General Anti-Avoidance Rules allows tax authorities to declare any business deal to be an “impermissible avoidance arrangement” if part or whole of the deal has been crafted with the intention of obtaining “tax benefits”.
While bringing the finance bill before the Lok Sabha, Mukherjee had diluted some of the harsher provisions of GAAR and announced that the onus of an avoidance arrangement would lie with the tax department and not on overseas investors.