DTC (Direct Tax Code) may bring Income Tax Rates decrease
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, theincome 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% ofincome 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 taxrates | 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 |
Tags-income tax rate in dtc,dtc,dtc income tax rate,direct tax code,what is dtc,what is direct tax code, new income tax rate slab,income tax rate for fy 2012-13,income tax rate for ay 2013-14.
Best Regards
Prakash Nair
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