Thursday, August 26, 2010

Direct Tax Code gets approval from Cabinet

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Direct Tax Code has finally got an approval from Cabinet and will be implemented from April 2011. We had posted an article just a few days back regarding this and the fact that tax payers are eagerly waiting for Direct Tax Code as it would lower their tax liability.

Today, the government finally gave green signal for DTC and this would come into effect from April 2011.

The tax slabs are different than what was mentioned in the first draft though. However, it would still be beneficial for tax payers who are paying high taxes compared to other countries.

The new tax slabs will be as under:
0 - 2 Lakhs: No tax
2 - 5 Lakhs: 10% tax
5 - 10 Lakhs: 20% tax
More than 10 Lakhs: 30% tax

For Senior Citizen, there will not be any tax till 2.5 Lakhs. Corporate tax has been changed to 30% from the earlier 33%.

Good news for tax payers though it would have been great had the original draft been adopted which suggested 30% tax for more than 25 Lakhs.
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