Taxpayers to face higher tax outflows if Direct Tax Code gets implemented post Lok Sabha polls 2024

financialexpress.com:

The Lok Sabha Elections are underway, and with the poll results scheduled for June 4, discussions and speculations have already begun regarding the reforms and major pending works the new government will undertake. One of the major pending tasks in this regard is the implementation of the Direct Tax Code (DTC), which has been overdue for a long time.

Media reports, citing sources, suggest that if the BJP-led NDA government is re-elected in the ongoing elections, they will prioritize the implementation of the DTC. A report in the Financial Express last month stated that discussions were underway in the finance ministry regarding the implementation of key direct tax reforms, with the draft prepared in 2019 by a special task force serving as the foundation for the overhaul.

During the UPA-1 government in 2009, the Direct Tax Code was first proposed. However, the proposal did not see any conclusive progress and went through several revisions until 2014 and ultimately lapsed with the dissolution of the 15th Lok Sabha. In August 2019, a task force appointed by the Modi government submitted its report on direct tax reforms, aimed at overhauling the six-decades-old Income Tax Act.

Experts are of the view that whoever comes to power, the NDA or INDIA bloc, at the Centre next month, direct tax reforms or Direct Tax Code will remain one of the key agendas of that government.

Also Read: Govt kicks off direct tax code revision

The DTC is the regulation that aims to replace the existing Income Tax Act. It covers all types of taxes, including corporate and personal income taxes. Through the direct tax reforms, the government wants to establish a single legislation with simplified tax laws and regulations.

Chintak Shah, Vice President