New Direct Tax Code as Cabinet Approves, Save little in Taxes from Next Fiscal Year-2011

New Direct Tax Code Bill gets Green Flag from Cabinet and on Thursday and proposed further to Rajya Sabha where has to be introduced in Monson Session. Pay a bit as tax from April, 2011.

One has to pay less as Tax, in fact have to pay less Direct taxes in every slab of income. This comes with the Cabinet cleared the Direct tax code which will be later introduced in Rajya Sabha during Monsoon Session, and referred it to a select committee.

On Monday Select Committee will introduce it into the Rajya Sabha. New Provisions under Direct Tax Code Review are:–

• 10% Tax for Income Group between Rs. 2 lakh – Rs. 5 lakh.

• 20% Tax for Income Group between Rs. 5 lakh – Rs. 10 lakh.

• 30% Tax for Income Group over Rs. 10 lakh.

For women and senior citizens, the exemption limit would be Rs 2.5 lakh per annum. At present, women have to pay tax on incomes of Rs 1.9 lakh per annum or more and senior citizens on incomes of Rs 2.4 lakh or more.

The limit for exemptions for Salaried people is Rs. 2 lakh, while that for Senior Citizens is Rs. 2.5 lakh. Corporate tax has been kept at 30%. New codes will be into affect from April 2011.

The maximum that anyone can gain from this proposal in terms of savings on the tax burden compared to the present levels is Rs 26,000 per annum. Even that is only possible if you are a woman and have an annual income of Rs 10 lakh or more. That’s a far cry from the Rs 2.2 lakh that the same person would have saved if the original DTC proposal had been accepted by the Cabinet.

After getting the approval of the Cabinet, the decks are cleared for tabling the legislation in the Monsoon Session of Parliament so that the new Act ushering in reduced tax rates and exemptions may come into effect from next fiscal.

Via: NDTV, CNN, youtube

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NEW DIRECT TAX CODE