Direct tax code(DTC) will bring major income tax rate cut for the individual
and HUF tax payers. DTC is proposed to present in this annual budget which will
increase the tax slabs of income tax. Finance Minister said that when the final
DTC will present in the parliament, the recommendation of the PSC(Parliament
standing committee) will be the rule.
According to the panel of parliamentary
committee, the income tax exemption limit( under this limit, the assessee needn't to pay any income tax) will increase to 3 Lakh rupees which is now of 2 lakh
rupees for the assessment year 2013-14.
10% income tax slab can be on the income range of 3 Lakh to 10
lakh rupees which is now on 2-5 Lakh rupees. 20% income tax slab is proposed by
the panel is 10-20 lakh whereas the 30% of income tax on the income of above 20
lakhs.
There are also some more points in direct tax code recommend by
the panel. Long term saving limit which is 1 lakh per annum is suggested to 1.5
lakh. Contribution to social security like pension scheme is suggested to 1.5
lakh. Medical insurance is suggested to 1 lakh, medical insurance for dependent 50 thousand
and professional studies and education Rs. 50000.
There are no change in the corporate tax with the DTC and the parliament
panel recommendation. DTC was schedule to introduce on 1 April 2012 but now it
is late and hope to introduce in this fiscal year only. DTC will take place of
the old law Income tax act 1961.
|
Income tax rates |
Current rate ay 2013-14 |
DTC Bill |
Parliament committee recommendation |
|
Exemption |
Upto 2 lakh |
Upto 2 lakh |
Upto 3 lakh |
|
10% |
2-5 lakh |
2-5 lakh |
3-10 lakh |
|
20% |
5-10 lakh |
5-10 lakh |
10-20 lakh |
|
30% |
Above 10 lakh |
Above 10 lakh |
Above 20 lakh |
