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I-T code will be released with discussion paper

NEW DELHI: Finance Minister P. Chidambaram on Tuesday announced that the draft Income-Tax code, aimed at simplifying and likely replacement of the existing law, was ready and would be released along with a discussion paper. However, as of now, no timeframe had been set for its release.

“The Income-Tax code is ready as of yesterday. Code is ready. But I am not in a position to release the code because I have decided that I will release it along with a discussion paper,” Mr. Chidambaram told newspersons here. As to why the discussion paper was essential, Mr. Chidambaram said it would explain the reasons for writing the code, the changes between the old law and the new law and the rationale for these changes. “The draft of the discussion paper that was shown to me is 70-page long, I am trying to compress it to about 50-60 pages. I have cleared only 25 pages of that.” When ready, the discussion paper would be floated along with the code for wider consultations. “When will that happen I cannot say, depending on how much time I would find to clear the discussion paper. But the code will be released only with discussion paper,” he said.

The I-T code, Mr Chidambaram explained, was only a draft for discussion for one year. It would probably be introduced two years after, he said. The code, moreover, was not an amendment to the Income-Tax Act but was based on different assumptions for an emerging economy. “I am not taking [the] I-T Act and amending it. I am writing a new code, based on very different assumptions, very different postulates, very different outlook to direct taxes,” he said.

Mr. Chidambaram also indicated that he would have a new Advisor in place of Parthasarathi Shome, who is to relinquish his post on January 11. However, he refused to disclose any names.

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