Direct Taxes Code 2009 Proposed Income Tax Rates From 1 April 2011

By: Abraham Williams | Posted: 01st February 2011

After much awaiting CBDT released the discussion paper on the Direct Taxes Code 2009 in June 2010, draft of which was released in public in August 2009. The revised discussion paper has considered various issues on the original proposals and come out with revisions in couple of proposals including MAT (Minimum Alternate Tax), EEE vs EET taxation regime, taxation of retirement benefits, taxation of income from house property and taxation of capital gains, among others. Here is an article that explainswhat will be the implications on the capital gains from stocks once the DTC passes as an act in the parliament.

These changes are far reaching and result in greater scrutiny of international transaction and at the same time will bring transparency, certainty and equity in transfer pricing regulations in India. An equitable tax structure is a sine qua non for an attractive investment destination.

Congress on the other hand has the right to tax gains or profits. Examples would be dividends, royalties, alimony, pensions and things of that nature.

"The 16th Amendment must be construed in connection with the taxing clauses of the original Constitution and the effect attributed to them before the amendment was adopted." EISNER v. MACOMBER, 252 U.S. 189 (1920).

In order to help pay for its war effort in the American Civil War, the United States government issued its first personal income tax, on August 5, 1861 as part of the Revenue Act of 1861 (3% of all incomes over US $800; rescinded in 1872). Other income taxes followed, although a 1895 Supreme Court ruling, Pollock v. Farmers' Loan & Trust Co., held that taxes on capital gains, dividends, interest, rents and the like were unapportioned direct taxes on property, and therefore unconstitutional.

'Tax' refers to payment of fund to governmental authorities against which no direct benefits may be expected by the tax payers. The governmental authority of any modern country is found to require huge financial resources to discharge various functions. The functions done by modern government may be of two basic types which are- (i) compulsory functions and (ii) optional functions. Traditional compulsory functions refer to the areas of activities relating to the defence of the country and maintenance of internal law and order. To discharge these compulsory functions any modern government is required to maintain security and police forces.

There are some who may be shocked to learn that the income tax, which is applied to people's wages, is a rather recent occurrence in American history. For the first 150 years of our nation there was no income tax. In fact, the first few times the government tried to enact such a scheme, the Supreme Court found it unconstitutional (1850-1913). If it was unconstitutional then, why is it constitutional now?

Dave Champion is a paralegal and the creator of original intent, a web site dedicated to teaching all Americans the truth about America's tax scheme. Mr. Champion has spent years studying the tax code, Supreme Court case history, and the Constitution; and has determined that most of us should not be taxpayers subject to the tax code. He also assists people to live within the law as nontaxpayers.

Remove the Federal Reserve and return all money functions back to the government. All Federal Reserve banks should be converted to clearing houses for management of member banks. The banks system should be prohibited from practicing fractional reserve banking and the government should return to value based currency and prohibit debt based currency.

For many in the freedom and tax honesty movement dual citizenship or the dual meaning of the term "United States" Citizen causes a bit of confusion. The term "United States" when used in the Constitution means the many states of the Union however when used in federal statutes it means under federal jurisdiction within the federal enclave or territory.About the Author
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Tags: personal income tax, capital gains, retirement benefits, war effort, investment destination, american civil war, direct taxes