et brings to you opinions of renowned experts on implications of the direct tax code for investors in different avenuesdinesh kanabar deputy ceo chairman tax kpmgdtc closes important taxsaving avenueon direct tax code the government has done a commendable job in not only simplifying income tax provisions but also proactively seeking and reacting constructively to public feedback through successive discussion drafts from a capital gains perspective a lot is spoken of its impact on shares and securities but it is important not to lose sight of capital gains tax impact on other assetsunder the current tax regime other assets such as immovable property were classified as longterm capital assets if held for more than three years whereas under revised dtc a shorter period of one year is prescribed thus all other assets will be entitled to indexation benefits much earlier under dtcdue to shift of base year revised dtc provides capital gains exemption to unrealised gains from 1981 to 2000 while this may be positive news for investors who had purchased investment assets say immovable property in 1980s it will definitely impact adversely all other assets purchased post 2000 due to normal tax rate applicable under dtc as against the present reduced tax rate of 20 under the revised dtc the capital gains savings scheme which entitled deduction against capital gains arising on sale of any investment asset is dropped this has closed out an important tax saving avenue for taxpayers one hopes that with suitable representation the government continues with such capital gains savings scheme or introduces other alternative saving schemes to encourage savings and avoid tax hardship to investorkaushik mukerjee executive director pricewaterhousecoopersgood news for home buyers retail investorsthe draft direct tax code dtc had envisaged a paradigm shift in the scheme of personal taxation the focus was on taxation of income without exemptions at a lower tax rate the discussion paper on the revised dtc deviates from that scheme significantlyexempting retirement benefits like provident fund life insurance products annuity schemes under the current tax law is proposed to be continued under the revised dtc originally withdrawal from the retirement benefit schemes was to be taxed lumpsum withdrawals on maturityretirement from life insurance schemesprovident fund would have resulted in taxation at the highest rate india does not yet have highclass social security like developed countries the proposal to exempt the retirement benefits would leave a larger capital base for the retiree and offset the gap to some extentthe salaried class is one of the most taxburdened in this country the original proposal to tax employers contribution to providentsuperannuation funds and valuation of rent free accommodation at market value would have left very little takehome pay for a salaried employee the proposal to exempt such contribution and valuing accommodation possibly as per current rules should remove the resultant anxiety of the salaried class similarly house owners have reasons to cheer it was proposed earlier that even vacant property would be taxed on presumptive rental value there was no