Definition
Direct Tax Code (DTC)
The Direct Tax Code is the long-discussed effort to replace the Income Tax Act with a simpler, modernised and consolidated direct-tax law.
India's direct-tax law has grown complex through decades of amendments. The Direct Tax Code (DTC) is the recurring proposal to rewrite it into a cleaner, easier-to-administer statute with rationalised rates, fewer exemptions and clearer drafting, reducing litigation and compliance burden.
Various drafts and committees have shaped the idea over the years, and several reforms — like the new tax regime and concessional corporate rates — embody its spirit even ahead of a full code. A comprehensive rewrite remains a stated direction for simplifying direct taxation.
Related terms
- Revenue Foregone (Tax Expenditure)Revenue foregone, or tax expenditure, is the estimated revenue the government gives up by granting exemptions, deductions and concessional rates.
- Faceless AssessmentFaceless assessment is a system in which income-tax scrutiny and assessment are conducted electronically without physical interface between the taxpayer and a specific officer.
- Section 115BAC New Tax RegimeThe new tax regime offers lower income-tax slab rates in exchange for forgoing most exemptions and deductions, available as an optional alternative to the old regime.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.