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Sub theme:-Any other related issues concerning the thrust area of the seminar.

Title of the paper: - Probable effect of DTC on Small Scale industries. SYED ZAHID PERWAIZ Research scholar kolhan university Contact: - 9031262505/9835355367 Email: - zahid.perwaiz@gmail.com Abstract:The direct tax code aims at a comprehensive reform in the sphere of personal and corporate taxation. An attempt has been made in this paper to discuss the impact of the code on common people and small scale industries. To safe guard the interest of business, industry and workmen there are number of chambers of commerce and Trade Unions but for common self employed people and retired people there are none. The Code is yet debated and recommendations need to be sent to finance Ministry. There is a great difference between" Code" and the "ACT". The government is trying to bring in Direct Tax Code" instead of present system of "Tax under Finance Act. Once tax act is converted into a code it would generally not be necessary to introduce changes every year along with budget. This is a reform which the government wants to bring in for the benefit of the people. The code has proposed no change in the exemption limit of the personal tax. It remains Rs 1,60000 for men, Rs 1,90,000 for women and Rs 2,40,000 for senior citizen. Yet percentage of taxation has been reduced up to income of Rs. Ten lakh. Prima facie, the tax liability will reduce significantly as the draft code proposes to tax incomes up to Rs 10 lakh at 10%, that between Rs 10 lakh and Rs 25 lakh at 20% and sum in excess of that at 30%. Now people pay 10% tax only if his income is less than Rs 3 lakh. A person drawing Rs 10 lakh now pays Rs 2.11 lakh as tax. If Code is implemented he would pay tax amounting to Rs 84,000/- only. Is it not really good? But all deduction now under 80 c will vanish as it is available now except for a few like new pension schemes, LIC etc! This means death nails on small saving schemes. However deduction under 80 C will be enhanced from Rs 1 lakh to Three lakh. This allowance would surely help generation next. But the exemption on retirement benefits would vanish. Young people will not get tax

benefit. On implementation of the code all perks would considered part of the gross salary for the purpose of taxation. The impact of that on tax liability of an individual will be known only when the rules are prescribed by the income-tax department at a later date. Under a presumptive taxation regime, small and medium indudtriescan opt for a flat tax on their turnover instead of paying taxes based on a detailed assessment as per the tax laws. The new code has proposed to enhance the limit for availing presumptive taxation option to businesses with a turnover of up to Rs 1 crore from the present Rs 40 lakh. Under the new direct tax code, any business having a turnover of up to Rs 1 corer can pay tax at the rate of 8% of the total turnover or gross receipts.Businesses that opt for a presumptive tax regime are not required to maintain the books of accounts, thereby bringing down their cost of compliance significantly.Moreover, they can pay their entire tax liability at the time of filing their returns, that is, they do not have to pay periodic advance taxes.With a higher limit, more businesses can take the advantage of this regime. However, professionals such as chartered accountants will not be eligible for this regime.

References:Shetty, S.L. (2010), Mare Tax Concessions for More Inequality, Economic & Political Weekly, 2010 XLV (11).,March 13

Rao, M., Rao, G. and Rao, K. R. (2009), Direct Taxes Code : Need for Greater Reflection, Economic & Political Weekly, XLIV( 37), September

Rao, K. R. and Chakraborty, P. (2010), Goods and Services Tax in India : An Assessment of the Base, Economic & Political Weekly, XLV (1), January 2
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