The BJP has strongly objected to the Direct Tax Code (DTC) the government is planning to replace the present tax regime with, saying that it is against the interest of the "aam admi" as it would burden him with more taxes.

It has, instead, asked the government to continue with the present tax regime but bring down the highest tax rate for all individuals, firms and companies from 30 percent to 25 percent.

Senior party leaders, Sushma Swaraj and Arun Jaitley led a delgation of party members to Finance Minister Pranab Mukherjee to submit a memorandum to this effect on Tuesday.

The memorandum said the "aam admi" would be adversely affected by the withdrawl of tax incentives on saving schemes and fringe benefit tax.
 
Talking about the small and medium entrepreneurs, the party said the presumptive tax of 8 per cent on turnover on businesses having turnover up to Rs 1 crore was excessive and needed to be brought down. Though DTC exempts such entrepreneurs from maintaining regular books of accounts, in actual practice they would be forced to do so to justify that their turnover was below the limit.

The memorandum also wanted the provision declaring any receipt or payment of loan or deposit exceeding Rs 20,000 as income unless paid by draft or account payee cheque revised to Rs 50,000 and described the proposed procedure to compute business income as cumbersome and harrowing for small businesses.

It wonders how small traders would be able to comply with the code requiring them to maintain vouchers and receipts of items of over Rs 50. They are supposed to keep carbon copies or counterfoils of serial numbers of receipt containing name and address of the buyer purchasing any edible or non-edible items costing more than Rs 50 a kilo like pakoras, dosas, idli, vegetables and dals.

Please see a detailed report in Policy section.