17 Aug This is too good to be …
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 1stApril 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 I am reasonably assuming (since I haven’t read the bill) most the exemptions would have been withdrawn.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.