India unveiled the new draft Direct Tax Code ("the
Code") in August for public consultation. As per the current
timeline table, the draft Code is proposed to be discussed during
the winter session of Parliament and is expected to come into force
from April 1, 2011. The much awaited Code aims to consolidate and
amend the law relating to all Indian direct taxes and pave the way
for a single unified taxpayer reporting system. The intent of the
Code is to address the twin goals of rationalisation of tax rates
and expansion of the tax base. The Code proposes a cut in the
corporate tax rate from 30% to 25%, as well as reducing the number
of tax exemptions and holidays currently available. New transfer
pricing polices including the introduction of an advanced pricing
agreement programme seem on the anvil.
