“The cabinet has cleared the Direct Tax Code bill and it is likely to be tabled during the monsoon session of parliament,” the sources said after a cabinet meeting chaired by prime minister Manmohan Singh.
The draft Direct Taxes Code (DTC) along with a Discussion Paper was released in August, 2009 for public comments. Since then, a number of valuable inputs on the proposals outlined in these documents have been received from a large number of organisations and individuals. These inputs have been examined and the major issues on which various stakeholders have given their views have been identified. This Revised Discussion Paper addresses these major issues.It has been referred to the Select Committee, and will be introduced in Rajya Sabha on Monday. The new provisions under the Direct Tax Code are as follows:New Direct Tax Code 2011: Major relief for salaried class
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%
Corporate tax has been kept at 30%.
The limit for exemptions for salaried people is Rs. 2 lakh, while that for senior citizens is Rs. 2.5 lakh.
The new Direct Tax Code comes into effect from April, 2011.
“As of now, it is proposed to provide the EEE (Exempt-Exempt-Exempt) method of taxation for Government Provident Fund (GPF), Public Provident Fund (PPF) and Recognised Provident Funds (RPF) …”, the revised DTC released by the Finance Ministry said.
