What Is The Full Form Of DTC In Income Tax?
DTC full form in income tax is Direct Tax Code. It’s a plan from the Indian government to change the current tax system. The objective of the Direct Tax Code is to replace the old Income Tax Act of 1961. The goal, therefore, is to simply put the tax rules so that they fit better with today’s economy and match up with the best practices worldwide. The new rules make the whole tax process fair and easier for all: cut down on the effort it takes to follow these rules and make it easier to do business in India.
Development and Current Status:
The DTC started with its first draft in 2009. After a lot of changes and discussion, in 2017, a task force gave new suggestions that, in turn, suggested simplifying personal and company tax rules. This is in order to help in making people follow the tax laws better. But the DTC has still not been made a law and is still just a suggestion. It was shown to the Lok Sabha in 2021 but pulled back later in the year. There is no plan for when it might be brought back.
Proposed Benefits and Features:
The DTC aims to cut down the number of special exceptions, start processing tax returns electronically, and clarify tax laws to avoid legal issues. For companies, it proposed to lower the tax on profits and abolish the tax on profits given to shareholders in the form of dividends. The DTC also proposes to bring in new ways of checking taxes through faceless e-assessments to reduce direct contact between taxpayers and tax officials.