Dr.

Ram Manohar Lohiya National Law University, Lucknow

B.A., LL.B. (Hons.)


Taxation Law
DIRECT TAX CODE
Synopsis





Submitted to
Mr. UP Singh
(Professor)

Submitted by
Sudhir Kumar Singh
Roll No. 138
Section B
7
th
Semester

SCOPE OF THE PROJECT
The scope of this project is to Research the changes Opined in the new Direct tax code
bill and to analyze the changes brought in this code bill.

RESEARCH METHODOLOGY
The methodology applied for this research is exploratory and theoretical. It explores the
changes made in the bill and its new feature.
Objective
The objective of this project is to show that the new direct tax code bill is the more
effective than all other precious tax code bill.
Hypothesis
WHAT does the new direct tax code (DTC) seek to achieve? Will it add an impetus to the
India growth story or will it turn to an over-baked cake that will spoil the party? How
about households, investors and businesses? Will their lives change once the new tax
code gets implemented in financial year 2012? Before beginning to examine these issues
in detail, let us check the DTC vital stats. An ideal direct tax regime should be simple to
understand and administer, equitable and progressive, and reward economic activity and
above all it should provide buoyancy to the governments revenue Does the proposed tax
code stand these tests?
The draft Direct Taxes Code (DTC) along with a Discussion Paper was released in
August, 2009 for public comments. Since then, a number of valuable inputs on the
proposals outlined in these documents have been received from a large number of
organisations and individuals. These inputs have been examined and the major issues on
which various stakeholders have given their views have been identified.
1

Consider the first aspect. The governments proposed direct tax code has been widely
welcomed. The new tax code is indeed simple to understand and will go a long way in
reducing the ambivalence and discretion which plagues the existing Income Tax Act,
1961. The new tax code seeks to leave little scope for multiple interpretations and will
thus curb disputes and litigation, something very common with the existing Act. The new
code is in fact a completely new tax law aiming to simplify the direct tax regime in India
and has tried to capture the best international practices. This new code also attempts to

1
http://www.etaxindia.org/2010/08/direct-tax-code-2011.html
make direct taxes equitable by introducing moderate levels of taxation and expanding the
overall tax base. The DTC attempts to simplify the legalities to enable better
understanding so as to ensure a higher degree of compliance. For instance, the new
directive has done away with different heads of income. The two broad heads of income
would now be income from ordinary source and income from special source. The first
head would include income from employment; house property and business while the
second head would include capital gains on equity and equity oriented funds and income
of any other nature.

Method
This project involves study and review of various articles and law reviews published in
India as well as other online forums along with certain documents from e-resources.

Sources
The sources that have been taken up for this project are various articles published
regarding new tax code bill.

LITERATURE SURVEY
Direct Taxes Code 2009: Proposals Concerning Taxation of Companies-
T.N.Pandey, Company Law Journal.
Direct Taxes Code: Some Thoughts, D.P.Mittal, Advocate, Direct Tax Laws
Highlights of New Direct Taxes Code Bill, 2009- C.A Devendra Jain
Changes Galore- Indias International Obligations in Direct Taxes Code





TENTATIVE CHAPTERIZATION
1. Introduction

2. Changes opined in the New Direct Tax Code

3. The objectives for the preparation of Direct Tax Code

4. Salient features of the proposed Direct Tax Code

5. MAT provisions in the Direct Tax Code

6. Taxation of Income from Employment

7. Taxation of Income from House Property

8. Taxation of Capital Gains

9. Double Taxation Avoidance Agreement

10. Conclusion

11. Bibliography








CONCLUSION
The objects of the new code are laudable and welcome by industry as path breaking,
reformation and innovative. But whether it is so, it is yet to be seen. All taxpayers,
advocates, chartered accountants and tax-administration are well-versed with the present
pattern of the Income-tax Act, 1961. Hardly is there any matter on which the Supreme
Courts decision is not available. It took almost fifty years for the Income-tax Act, to
achieve certainty through interpretative interpretation of the Supreme Court and various
High Courts. The courts have made the tax laws clear, certain and consistent. Their
disturbance would render them unclear, uncertain and inconsistent, especially when the
law is drafted not in a legal language but in the language of layman which only layman
but not the court understands, as such understanding varies from man to man. Perhaps,
only two concepts which have so far defied solution and would continue doing so are
income and, whether an expenditure is revenue or capital
2
. Even the new Code is
unable to define them precisely. Income tax is tax on income is a classical example of
what the interpretators have to say about their instability in defining income.


Bibliography
Decoding Direct Taxes Code- Making Companies Slim
Direct Taxes Code- Impact on International Taxation, Fedry R.Daruwala
Tax Avoidance and evasion- Scope for further refinements in the Direct Taxes Code.



Contribution

I will research in this project the origin of direct taxation and how every year the new tax
code bill plays a role in the development of law of taxation.


2
Highlights of New Direct Taxes Code Bill, 2009- C.A Devendra Jain