New Direct Income Tax Code 2011 in India from Next Financial Year April 2011.

Indian Government has made a New Direct Taxes Code & replaced the Old one i.e Indian Income Tax Code of 1961 was replaced by the New one. The new Income Tax Act will come into force from April 1, 2011. Now the Taxpayers will have to pay less direct taxes from the next financial year i.e from April 2011.New Direct Taxes Code is an attempt to simply the tax-life of an individual. The Code aims at reducing tax rates, but expanding the tax base by minimizing exemptions. The new provisions under the Direct Tax Code are as follows:

Direct Tax Code 2011 – 2012 (For Men):

• Income Upto 1.6 Lakhs: No Income tax
• Income 1.6 Lakhs to 10 Lakhs: 10%
• Income 10 Lakhs to 25 Lakhs: 20%
• Income Above 25 Lakhs: 30%

Direct Tax Code 2011 – 2012 (For Women):

• Income Upto 1.9 Lakhs: No Income tax
• Income 1.9 Lakhs to 10 Lakhs: 10%
• Income 10 Lakhs to 25 Lakhs: 20%
• Income Above 25 Lakhs: 30%

Direct Tax Code 2011 – 2012 (For Senior Citizens):

• Income Upto 2.4 Lakhs: No Income tax
• Income 2.4 Lakhs to 10 Lakhs: 10%
• Income 10 Lakhs to 25 Lakhs: 20%
• Income Above 25 Lakhs: 30%

Corporate tax has been kept at 30%.

Speaking about The New Tax Code Finance Minister Pranab Mukherjee explains that the aim is to eliminate distortions in the tax structure, introduce moderate levels of taxation, expand the tax base, improve tax compliance, simplify the language and lower tax litigations. Initial analysis shows that most of these objectives are achievable by tweaking of some provisions.

The new Code comes into effect from April, 2011.