New Direct Tax Code (DTC) is said to replace the existing Income Tax Act of 1961 in India.
Features of DTC
1. The DTC abolishes the difference between Short Term Capital Gain and Long Term Capital Gain
2. The securities transaction tax or STT has been abolished.
3. The upper limit on Tax Savings based investment has been hiked from INR 100,000 to 300,000.
4. Deductions for Rent and Maintenance would be reduced from 30% to 20% of the Gross Rent.
5. Income Group has been sub divided in to two Part :
a. )Income By Ordinary Source which include
- Income earned as Salary
- Income from Business or Profession
- Income from House Property (rental income)
- Capital Gains
- Residual income from other sources
b. ) Other Income Like NRI, Lotteries etc
The new provisions under the Direct Tax Code are as follows:
- Tax for income between Rs. 2 lakh – Rs. 5 lakh: 10%
- Tax for income between Rs. 5 lakh – Rs. 10 lakh: 20%
- Tax for income over Rs. 10 lakh: 30%
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%.
The new Code comes into effect from April, 2011.
After 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.
When enacted, the Code will replace the archaic Income Tax Act and simplify the whole direct tax regime in the country.
Income Tax Rates for financial year 2010-2011
| For Men | |
| Upto Rs. 1,60,000/- | Nil |
| Rs. 1,60,001/- to Rs. 5,00,000/- | 10 per cent |
| Rs. 5,00,001/- to Rs. 8,00,000 | 20 per cent |
| Above Rs. 8,00,000/- | 30 per cent |
| For Women | |
| Upto Rs. 1,90,000/- | Nil |
| Rs. 1,90,001/- to Rs. 5,00,000/- | 10 per cent |
| Rs. 5,00,001/- to Rs. 8,00,000 | 20 per cent |
| Above Rs. 8,00,000/- | 30 per cent |
| For resident individual of 65 years or above | |
| Upto Rs. 2,40,000/- | Nil |
| Rs. 2,40,001/- to Rs. 5,00,000/- | 10 per cent |
| Rs. 5,00,001/- to Rs. 8,00,000 | 20 per cent |
| Above Rs. 8,00,000/- | 30 per cent |
Direct Tax Code will inaugrate a new phaze of income Tax Act but it should be implemented in a new and improved means because so many persons are there in India who evade tax by using so many unauthorised practices so i would like to tell that i should be cover each and every persons whose income are required to be taxed under DTC means there should not be any ground to evade tax.
Thanks.
I hope that I will get your response whatever i have mentioned.
Hopefully..there would not be any loophole in this DTC