Direct Tax Code gets nod
Paving the way for radical reform and simplification in the Direct Tax system the Union Cabinet on Thursday approved the much-talked about Direct Tax Code (DTC) Bill proposing to provide more Income Tax relief to salaried class.
The DTC Bill, which seeks to replace the archaic Income Tax Act, 1961, proposes to raise the Income Tax exemption limit from existing Rs 1.6 lakh to Rs Two lakh, highly placed sources said. The Income Tax exemption limit for senior citizens is proposed to be raised to Rs 2.5 lakh.
Under the moderate tax slab suggested in the DTC Bill the government proposes tax rate of
10 per cent for income between Rs 2 lakh and Rs 5 lakh,
20 per cent for income between Rs 5 lakh -
Rs 10 lakh and 30 per cent for income over Rs 10 lakh.
Currently the Income Tax rate is 10 per cent on income above Rs 1.6 lakh and upto Rs 5 lakh, 20 per cent on income above Rs 5 lakh and upto Rs 8 lakh and 30 per cent on income above Rs 8 lakh.
The government plans to implement various provisions of the DTC Bill with effect from April One 2011
It is learnt that the government is likely to introduce the DTC Bill either tomorrow or next Monday in both houses of Parliament. After its introduction the draft DTC will be sent to Select Committee of both houses for scrutiny.
After examining the recommendations of the Select Committee the government will move the DTC Bill for approval of Parliament in the Winter Session