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It is said that the recent budget has laid the groundwork for Direct Taxes Code. What is your take?
Sudha Padmanaban, Chennai
The Finance Minister has promised implementation of DTC from next year which commitment he couldn't give with regard to Goods and Services Tax. GST calls for Constitution amendment which is not possible unless the BJP-ruled States, opposed to GST in its current form, cooperate.
Apart from thisthere is nothing to encourage the belief that the DTC roll-out has started. The gender-based tax advantage is being narrowed which takes the tax regime closer to the DTC. But DTC does not propose any tinkering with senior citizen norms as has been done . So the signals, if any, are confusing.
I-T returns
Do the salaried class have to file I-T return any longer?
Pavitra Parthasarathy, Chennai
The relief from the rigmarole of filing returns by the salaried class is all set to materialise. The Central Board of Direct Taxes would come out with a notification soon on Section 139. The section itself does not in terms refer to the salaried class, but the Explanatory Memorandum says clearly that the power given to the CBDT is going to be used in favour of the salaried class. It is expected that only those whose salary income does not exceed Rs 5 lakh an annum would be exempted.
Foreign investors in MFs
Why foreigners have been allowed to invest in the Indian stock markets?
Suresh Vernekar, Panaji
Foreign Institutional Investors (FIIs) registered with the Securities and Exchange Board of India (SEBI) were allowed to invest from 1991. This was tweaked to allow sub-accounts and participatory notes that have fuelled the suspicion that bulk of the FII inflow is actually money stashed abroad returning to India duly laundered. Budget 2011 allows foreign individuals too to invest in stock markets through SEBI-registered mutual funds.
In other words, foreign individuals, unlike FIIs, would not have a direct access to Indian bourses but only through mutual funds. Time will tell whether it would add more depth to the Indian markets or facilitate more and more money laundering or both which has been the experience with FIIs.
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