Government of India has recently introduced Direct Tax Code Bill 2009. This, I am assuming, will have far reaching effects and simplify Direct Tax Laws. Assuming, since I have had only a cursory glance at the document, I have no urgency since taxation is not my professional interest and I am going to get the info in professional forums, anyway, within a couple of weeks!
Good News is we are likely to pay less tax and bad news is it comes into effect only in 2011. I am assuming (Again!!) this is applicable for Assessment Year commencing from 1st April 2011. This would mean for tax payment purposes, this law is applicable with effect from 1st April 2010. I need to stop talking law right now, if I know what is good for me. So, I am giving below the salient features as far as I understood.
- Basic Exemption continues to be Rs.1.60 lacs
- Savings exemption threshold increased to Rs.3.00 lacs
- Income up to Rs. 10 lacs is taxed at 10%
- Income from Rs.10 lacs to Rs.25 lacs is taxed at 20%
- Income above Rs.25 lacs is taxed at 30%
- If your income is Rs.25 lacs, you should save little less than Rs.4.00 lacs in taxes.
- My quick scan suggests that a couple of exemptions are missing. I am reasonably assuming (since I haven’t read the bill) most the exemptions would have been withdrawn. It is only logical.
- Corporate Taxation will be 25% instead of 30%
- Minimum Alternate Tax will be 2%
- If there are differences between Long Term and Short Term Capital Gains, I am unable to see them.
Experts will throw light in coming days and may well bust the feel good factor the bill provided to me. Still, it is a good lunch break topic for now.
If you are really bored or suffer from insomnia you can download the full text of the bill here. Or use this link. http://tinyurl.com/orc2×2 They are uploaded by me and are safe to download.
Tags: Direct Taxes, IT, Taxation
As always, any of these amendments in tax laws will come with own list of positives & negatives. Like the author mentioned, I would also like to play the wait & watch game. Need to see whether we are well off paying taxes and enjoying exemptions OR enjoying lesser taxes and enjoying no exemptions. And as usual, talks are always about people who pay their taxes…. the government conveniently keeps away from those who evade taxes.