The unveiling of the draft code on direct taxes is a historic move as it endeavors to replace the over four-decade-old Income Tax Act, 1961 and bring about substantial changes in the tax system of the country.

August 2009 witnessed one of the most significant changes in terms of revamping of the old tax law in India. On August 12, 2009, the Union Finance Minister Pranab Mukherjee stuck to his promise of introducing a new Direct Tax Code. The draft Direct Taxes Code Bill, 2009 (hereinafter referred to as `the Code' or DTC) was unveiled for the first time for public review. The Finance Minister has invited the general public, corporate houses as well as trade bodies to make representations for the improvement and further rationalization of the Code.

This was a historic move as it endeavored to replace the over four-decade-old Income Tax Act, 1961 (the Act) and bring about substantial changes in the tax system of the country. It is expected to make taxation less cumbersome and induce better compliance. While some acknowledge the DTC as pathbreaking, reformative, and drafted in a common man's language, others think that the Code falls short of its stated objectives. The euphoria thus engulfing the much-hyped DTC has not been able to veil the shortcomings it suffers from. These will be hopefully dealt with by the time it is due for release, or it might give rise to another questionable and rigid law. If everything goes in the right direction, one can look forward to have the Code implemented with effect from April 1, 2011.

The Analyst Magazine, Direct Tax Code, DTC, Marginal Rate, Exempt Exempt Tax, EET, Gross Domestic Product , GDP, Corporate Tax Rates, Securities Transaction Tax, STT, Long-Term Capital Gains, LTCG, Foreign Institutional Investors, General Anti Avoidance Rules, GAAR, Gross Assets, Capital Gains.