By CA Manoj Kohli 28thAugust2010 In a move that could leave more money in the hands of people, the government on Thursday proposed to raise exemption limit on income tax from the present Rs. 1.6 lakh to Rs. 2 lakh. The new Act would usher in reduced tax rates and exemptions that may come into effect from next fiscal. The bill also proposes income tax for Rs. 2- Rs. 5 lakh slab to be 10 per cent, and 20 per cent on income up to Rs. 5-Rs. 10 lakh, and 30 per cent on income beyond that. The bill has exempted senior citizens earning up to Rs. 2.5 lakh. The direct tax code bill also seeks to remove surcharge and cesses on corporate tax, which could provide relief to business houses.