The implementation of the Direct Taxes Code (DTC), which seeks to overhaul 50-year-old income tax laws, is likely to be delayed as it needs a fresh relook. 

The government was planning to implement the DTC by April 1, 2013, but the events which unfolded after the 2012-13 Budget — ranging from the controversy over the General Anti Avoidance Rules (GAAR) and retrospective tax issue has meant a fresh approach to tax laws. 

The government has put on hold the implementation of GAAR and a panel has been set up to examine the issues raised by jittery investors. The government has also soft pedaled on the issue raising a fresh tax demand on telecom operator Vodafone after a flurry of protests, which followed the 2012-13 budget measures. "DTC has gone through various versions...I need time to look at it. I am only 28 days old (in the finance ministry)... It requires a fresh look," finance minister P Chidambaram told a news conference after his meeting with chief commissioners and other senior officials from customs, excise and service tax departments. During his previous stint in the finance ministry, Chidambaram had initiated the drafting of DTC. But there were changes to the first draft and provisions were diluted. 

The finance minister said tax officials have been asked to be taxpayer friendly and not adopt a tough approach. "Most people want to compliant with taxes and get on with their lives. There's only a small number which is non-compliant. We have to be firm with the small number. We are not going to be regarded as a hounding tax administration." 

The government has taken several measures to calm anxious investors, who have stayed on the sidelines since the controversial tax proposals were unveiled in the 2012-13 Budget. Asked whether the government will again postpone the implementation of GAAR, Chidambaram said he was awaiting the report of the panel headed by Parthasarthi Shome. 

Chidambaram also said he was hopeful of getting the Constitution Amendment Bill, which is needed for the implementation of the Goods and Services Tax, approved by the end of the financial year. He said his hopes have been strengthened after his meeting with Sushil Modi, chairman of the empowered group of state finance ministers on GST. The Parliament's standing committee on finance is examining the constitution amendment bill and was scheduled to submit its report in the Monsoon Session but it has been delayed for now. 

The standing committee on DTC had recommended raising the income tax exemption limit to Rs 3 lakh from the previous Rs 1.8 lakh, among others, to provide relief to tax-payers. 

Chidambaram said he was hopeful that the government will achieve the Rs 5.1 lakh crore indirect tax target set for the current financial year. (Times of India)