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Overview of the Direct Tax Code Bill

The document summarizes key aspects of India's proposed Direct Tax Code (DTC) which aims to replace existing income tax and wealth tax laws. The DTC proposes a simplified tax slab structure for individuals with rates from 0-30% and increases some exemption limits. For companies, the DTC sets a uniform 30% corporate tax rate. It also increases the MAT rate to 20% and expands some tax deduction provisions while removing certain tax privileges and exemptions without addressing their full treatment.

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11 views8 pages

Overview of the Direct Tax Code Bill

The document summarizes key aspects of India's proposed Direct Tax Code (DTC) which aims to replace existing income tax and wealth tax laws. The DTC proposes a simplified tax slab structure for individuals with rates from 0-30% and increases some exemption limits. For companies, the DTC sets a uniform 30% corporate tax rate. It also increases the MAT rate to 20% and expands some tax deduction provisions while removing certain tax privileges and exemptions without addressing their full treatment.

Uploaded by

sonujaal
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd

Direct Tax Code

Prepared by:
Amrita Bulchandani
Raj Kalal
Kartik Chauhan
Introduction
 The Direct Tax Code (DTC) bill was tabled in Parliament on
August 30, 2010. Made up of more than 400 pages

 DTC bill is going to replace the Income Tax Act, 1961 and the
Wealth Tax Act, 1957

 It will come into effect from FY 2012-13 starting from 1st


April, 2011
Slabs Under DTC
Men and Women under the age of 65

Income IT Rate

Up to Rs 2,00,000 0%

Rs 2,00,001 to Rs. 5,00,000 10%

Rs. 5,00,001 to Rs. 10,00,000 20%

Above Rs. 10,00,001 30%


Cont.
Men and Women above the age of 65

Income IT Rate

Up to Rs 2,50,000 0%

Rs 2,50,001 to Rs. 5,00,000 10%

Rs. 5,00,001 to Rs. 10,00,000 20%

Above Rs. 10,00,001 30%


Features of DTC
 The corporate tax rate has been proposed at 30% (including
foreign companies)

 MAT rate has been increased to 20% and credit for tax paid
under MAT in extended upto 15 years

 Wealth tax proposed at 1% where revenue increases 1crore

 Royalty and fees for technical services is to be taxed at 20%


of gross income
Cont.
 DTC allow the revenue department to seek tax from foreign
companies if it is proven that they are controlled from India

 Unit set-up in SEZ to get deduction from profits if set up


before March 31, 2014

 Exemption limits US 80C has been increased to 1.5 lakhs


from 1 lakh

 Tax audit limit is enhanced for profession Rs 25 lakh and from


business 1 crore Rs
Unanswered provisions
 The DTC doesn't talk about the amount up to which the
interest paid on education loan would be exempt from income
tax

 The DTC doesn't talk about deduction of up to Rs. 20,000


under section 80CCF available on investment in infrastructure
bonds

 Bank fixed deposits (FDs) of 5 years duration enjoy deduction


under section 80C but even this provision is not stated
Cont.
 It doesn't talk about the treatment of perquisites like company
car, employer provided housing accommodation, etc

 DTC takes away the privilege that women enjoyed as now


men and women would be treated same

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