The finance ministry in consultation with tax experts is drafting the new Direct Tax Code which will be introduced in 2008. It will be placed for discussion in the monsoon session of Parliament and replace the existing Income Tax Act which has become so complicated with the amendments made every year that it could only be comprehended by tax professionals and practitioners.

The main objective of drafting the new code is to make the law simple and easy for taxpayers while bringing in major policy changes regarding corporate taxation, non resident taxation, SEZ exemption, EET method of taxation and many more. The powers of CBDT will also be restructured making it a policy making board in alignment with the tax boards of countries like UK, US and Australia. The whole emphasis would be to make the new code short and light by removing redundant provisions and complex tax jargon.

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“Today it takes more brains and effort to make out the income tax form than it does to make the income.” This quote by Alfred E. Neuman aptly describes the plight of assessee on the recently introduced income tax return forms under the series ITR by the government.

Eight new Income Tax return forms now replace the old Saral forms. Accordingly, the income tax returns by all categories of assessees from the assessment year 2007-08 (Finanical Year 2006-2007) onwards, need to be furnished in the new format as returns in old forms would not be accepted. The new forms can be easily downloaded from the income tax department website www.incometaxindia.gov.in

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