New Delhi: 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 Rs1.6 lakh to Rs2 lakh.
The bill, introduced by Union finance minister Pranab Mukherjee, seeks to widen tax slabs to levy 10% rate on income between Rs2 lakh and 5 lakh, 20% on Rs5-10 lakh and 30% above Rs10 lakh.
For senior citizens, tax exemption is sought to be raised to Rs2.5 lakh from Rs2.40 lakh.
Currently, income from Rs1.6-5 lakh attracts 10% tax; from Rs5-8 lakh, 20% and beyond Rs8 lakh, 30%.
The proposed tax slabs are much lower than originally suggested in the draft DTC bill – 10% for Rs1.6 lakh to Rs10 lakh, 20% from Rs10-25 lakh and 30% for income above Rs30 lakh.
The Bill seeks to fix corporate tax at the current 30% but without surcharge and cess. With surcharge and cess, the current tax liability on companies comes to over 33%.
The legislation also proposes to increase MAT from 18% to 20% of book profit of a company. It seeks to levy dividend distribution tax at 15%.
When enacted, DTC will replace archaic Income Tax Act.
The Bill will now go to a parliamentary panel for scrutiny. The proposal has wide political backing and is likely to be approved when Parliament meets for its winter session, adds Reuters.