The Finance Ministry will make a presentation before a parliamentary panel on the bill on Direct Taxes Code (DTC), which is scheduled to replace archaic income tax act from April 1, 2012. “It”s a preliminary introductory meeting for the first time…the (Parliamentary Standing) committee must have had something to look at it.
They wanted us to explain–what are the structure, what are the elements–more of introductory presentation,” Revenue Secretary Sunil Mitra told reporters on the sidelines of an event orgnaised by management school IMI.
The DTC Bill was tabled in Parliament in the last session and therafter referred to the Parliamentary Standing Committee.
After criticism of some of the proposals of original draft, the Bill dropped a suggestion to tax retirement funds to at time withdrawal and levying tax on Minimum Alternate Tax (MAT) on the basis gross assets.
As per the DTC Bill, the income-tax exemption limit has been raised to Rs 2 lakh from Rs 1.6 lakh earlier. For senior citizens and women the tax exemption limit has been hiked to Rs 2.5 lakh.
The new Direct Tax Code proposes to tax incomes between Rs 2 lakh and Rs 5 lakh at 10 per cent, between Rs 5 lakh and Rs 10 lakh at 20 per cent and beyond Rs 10 lakh at 30 per cent.
Currently, income between Rs 1.6?5 lakh attracts 10 per cent income tax; between Rs 5?8 lakh, 20 per cent income-tax and beyond Rs 8 lakh, 30 per cent income tax.
For corporates, there will be no surcharge or cess.
The corporate tax rate is proposed to be capped at 30 per cent as against 33 per cent at present. The rate of tax on corporate incomes was proposed to be capped at 25 per cent earlier.
Also, the government proposes to raise the MAT on book profits to 20 per cent from current 18 per cent.