Direct Taxes Code Bill likely in winter session, says Chidambaram

New Delhi: The Direct Taxes Code (DTC) Bill, which seeks to replace the archaic Income Tax Act, is likely to be placed in Parliament during the winter session, finance minister P. Chidambaram said on Tuesday.

“We are trying to bring DTC in the next session,” the minister told reporters here.

The winter session may start in early December, after the completion of assembly elections in five states. The final draft of the DTC Bill, which has to be vetted by the cabinet, keeps the income tax exemption limit unchanged at ₹ 2 lakh for individuals. It proposes to introduce a fourth slab with a 35% tax rate for those with an annual income of over ₹ 10 crore.

Among other things, the Bill proposes to levy a 10% tax on dividend income exceeding ₹ 1 crore.

The minimum alternate tax (MAT) may be levied on book profit and not on gross assets, sources said. Further, the securities transaction tax (STT) is likely to be retained, as against the recommendation of the standing committee on finance that the levy be abolished.

At present, tax is levied on income of ₹ 2-5 lakh at 10%, ₹ 5-10 lakh at 20%, and above ₹ 10 lakh at 30%. Further, those earning more than ₹ 1 crore have to pay a surcharge of 10%.