The Union Cabinet on Thursday approved the DTC Bill to simplify the country's archaic direct tax laws. The government will now seek approval on Monday from parliament where the bill is expected to go through as the measure enjoys broad political support. The speaker will here decide to which committee the Bill will go to. It is likely that it will be referred to the standing committee on finance since all matters related to finance go to this committee.
Tax rates, which was learnt to be silent in the draft DTC Bill, have been included in the bill during the cabinet meeting, learns CNBC-TV18.
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The proposed tax reform will cut tax rates to bring in more people and companies under the net, phase out profit-linked exemptions for firms and replace them with investment-linked incentives. The corporate tax rate, which currently stands at 33% has been reduced to 30%, including cess and surcharge. The original draft had proposed 25%, but it has been revised upwards.
The basic tax exemption has been set at2 lakh. The first draft code had proposed1.6 lakh for all individuals and20,000 special rebate for women.
Incomes between2 lakh and5 lakh will be taxed at 10%, income between5 lakh and10 lakh will be taxed at 20% and for income above10 lakh a tax of 30%. Tax exemption for senior citizens will be2.5 lakh.
Capital gains tax remains unchanged. Wealth tax has been set at 1% above1 crore, while minimum alternate tax or MAT has been set at 20% on book profits.
Source : https://www.moneycontrol.com/news/economy/union-cabinet-approves-direct-tax-code-bill_481204.html
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