30 Aug : The Government on Monday tabled the much-awaited Direct Taxes Code bill (DTC) in the Lok Sabha which proposed to raise the exemption limit on income tax from the current Rs 1.6 lakh to Rs two lakh.
The bill, introduced by Finance Minister Pranab Mukherjee, seeks to widen income tax slabs to levy 10 percent rate on income between Rs 2 lakh to 5 lakh, 20 percent on between Rs 5-10 lakh and 30 percent above Rs 10 lakh.
For senior citizens, tax exemption is sought to be raised to Rs 2.5 lakh from Rs 2.40 lakh.
Currently, income between Rs 1.6-5 lakh attracts 10 percent tax; between Rs 5-8 lakh, 20 percent and beyond Rs 8 lakh, 30 percent.
The proposed tax slabs are much lower than originally suggested in the draft DTC bill — 10 percent for Rs 1.6 lakh to Rs 10 lakh, 20 percent between Rs 10-25 lakh and 30 percent for income above Rs 30 lakh.
The bill seeks to fix corporate tax at the current 30 percent but without surcharge and cess.With surcharge and cess, the current tax liability on corporates comes to over 33 percent.
The legislation also proposes to increase MAT from 18 percent to 20 percent of book profit of a company.
It seeks to levy dividend distribution tax at 15 percent. When enacted, DTC will replace archaic Income Tax Act.