Taxes Code To Be Implemented From 2011-12: FM

The government plans to implement the Direct Taxes Code (DTC) from 2011-12 after addressing all concerns relating to controversial proposals like taxation of retirement benefits, weeding out incentives for housing sector and changes in the Minimum Alternate Tax (MAT).

The proposals in the Code are only "illustrative" and are open for discussion and there is no need to think that these "have been decided," Finance Minister Pranab Mukherjee said.

Giving the roadmap for the Code that will replace the Income Tax Act of 1961, he said, "It will be implemented from 2011. So, the finance bill of 2011-12 would be appropriate."

The government, Mukherjee said, has identified seven critical areas of concern in the Code and would take suggestions on board before finalising it.

The critical areas of concern include shifting the base for computation of Minimum Alternate Tax (MAT) from book profits to assets; capital gains taxation in case of non-residents; double tax avoidance agreements; General Anti-Avoidance Rules (GAAR); taxation of foreign companies; taxation of charitable institutions; and shift to EET system for taxation of savings.

On the issues relating to taxation of savings at the time of withdrawal, the Minister said, "Whether it will be EET (exempt, exempt, tax) or ETE (exempt, tax, exempt) ... is to be finally arrived at a decision. So one need not rush to the conclusion that it has been decided. That is the short point that I would like to make it clear."

DTC has proposed that all savings schemes should be taxed at the time of withdrawal. Under the current dispensation, the savings schemes like Public Provident Fund (PPF) and General Provident Fund (GPF) are not taxed at all, while in some schemes like National Savings Certificate (NSC) only interest accruals are taxed.

The Code is also silent on tax incentives for housing sector as against the current practice of provide rebate on repayment of interest and principal on home loans.

As regards the MAT, the Code proposes to levy minimum tax on assets instead of book profits. The proposal evoked sharp reaction from the industry which described the move as introducing wealth tax on enterprises.

Referring to his interaction with the representatives of the industry on the Code at Delhi and Bangalore, Mukherjee said, "I told them to express (their) views candidly ... final decision will be taken after obtaining inputs from various stake holders and in depth discussions.
Source:PTI

Pay revision for polytechnic colleges : Update

On behalf of AIFPTO, General Secretary Shri N Chandra Shekhar,has led a delegation of Polytechnic teachers on Dt. 23-10-2009 and met Smt. Purandeswari, MOS HRD at her camp office in Visakhapatnam. AIFPTO Thanked her for taking initiative for submitting a note to Sri Kapil Sibal, HRM to consider review of MHRD recommendations for inclusion of PB4 for Polytechnic teachers. She assured us that a meeting with AIFPTO office bearers in the presence of Sri Kapil Sibal would be arranged after Nov. 1st to resolve the issue.

Shri N Chandra Shekhar advised polytechnic community to wait for better days to come and requested to give wide publicity of this news item among all polytechnic teaching community and local press.

Accept pay scale, IIT federation tells members

The All India IIT Faculty Federation (AIIITFF) President M Thenmozhi today urged faculty members of all the Indian Institutes of Technology (IITs) to accept and implement the recommendations of the Sixth Pay Commission.

“We have requested the faculty to accept the pay package in the interest of the entire IIT system,” Thenmozhi told reporters here after the faculty meeting at IIT Delhi today. The meeting was held to take stock of the situation after the HRD ministry met the IIT Council on October 19. The board of governors of most IITs will meet in a month’s time and the IIT faculty will meet thereafter.

Thenmozhi, however, said that the issue relating to the 40 per cent cap on promotion of professors to senior grades and the provision of contractual appointment at entry level continue to remain matters of concern.

Last month, HRD minister Kapil Sibal had assured the faculty that the government guidelines on the pay structure could be relaxed for promoting excellence. Faculty associations were unhappy about an HRD clause which said there would be a 40 per cent cap on professors who are eligible to receive higher pay after six years in the post.
Source:Business Standard