Will new Direct Tax Code bring back estate duty or inheritance tax? What we know so far
Direct Tax Code: Fearing estate duty, which is also known as inheritance tax or wealth tax, will be brought back in the new Direct Tax Code (DTC) being prepared by a panel?
Direct Tax Code: Fearing estate duty, which is also known as inheritance tax or wealth tax, will be brought back in the new Direct Tax Code (DTC) being prepared by a panel? Here's some relief for you. A DNA report today quoted an official source as saying that the new Direct Tax Code (DTC) panel may not recommend bringing back the estate duty as it could be "very complex". The source told the daily that it is difficult to make an assessment of the stock of wealth than the regular flow of income as assets can be disguised, or even stashed abroad. In 1985, the government had ended estate tax on inherited property. However, rumours of the return of estate tax have been making the rounds for several years. Even during the Budget 2018-19, the return of estate duty was widely speculated.
Currently, there is no tax at the incidence of inherited property. However, the owner is required to pay in lieu of the income earned from the inherited property.
The Direct Tax Code panel will submit its report to the finance ministry by the end of next month. The suggestions might be incorporated in the full budget to be presented by the next government, which will come to power after the end of ongoing Lok Sabha elections 2019.
Task force for new DTC
The Ministry of Finance had announced the creation of a task force for drafting new Direct Tax law in November 2017. An official statement in November 2018 said, "In order to review the Income-tax Act, 1961 and to draft a new direct tax law in consonance with the economic needs of the country, a Task Force was constituted by the Government of India in November 2017. In partial modification of the earlier order, the Government has appointed Akhilesh Ranjan, Member (Legislation), CBDT as Convenor of the Task Force. Other members of the Task Force remain unchanged."
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The panel was scheduled to submit its report to the Government by February 28, 2019. However, it was extended.