Union cabinet approves DTC Bill
The Union Cabinet today 26 August approved the DTC Bill for simplifying the country’s direct tax laws. The govt. will now seek approval on 30th of this month from parliament. Then the speaker will decide to which committee the Bill will go to. Most probably it will be referred to standing committee on finance since all the matters related to finance go to this committee itself.
Corporate tax rate in India, which is currently standing at 33% has been reduced to 30%, including the cess & surcharge. Actually the original draft has been proposed at 25%, but it has been revised upwards than the proposed one.
Basic tax exemption has been set at Rs 2 lakh. First draft code has been proposed to Rs 1.6 lakh for all individuals and Rs 20,000 reduced rebate for women.
Those who have Income between Rs 2 lakh & Rs 5 lakh need to be taxed at 10%. Those who have income between Rs 5 lakh & Rs 10 lakh need to be taxed at 20%. And for income above Rs 10 lakh they have a tax of 30%. The tax exemption for the senior citizens will be Rs 2.5 lakh.
The capital gains tax remains unchanged. The wealth tax has now set at 1% above Rs 1 crore, where the minimum alternate tax or MAT has set at 20% on the book profits.
Hopefully the new direct tax code will be implemented from April 2011.