The Union Cabinet is expected to the take up the Direct Tax Code (DTC) Bill on Thursday amid indications that it would be introduced in the Parliament early next week. DTC Bill, once legislated, will replace the archaic Income Tax Act by rationalising tax slabs for both corporations and individual I-T payers.
The first draft of the code, which was put up for public discussion in August last year, had proposed a sweeping rejig of the existing tax slabs that would benefit each one of Indias 3.15-odd crore tax payers.
Under the proposed norms in the first draft income tax would be charged at 10 per cent tax for income between R1.6 lakh and R10 lakh, 20 per cent between R10 lakh and R25 lakh and 30 per cent beyond R25 lakh.
Besides, the draft had proposed to increase the ceiling on tax savings investments to R3 lakh annually from R1 lakh now.
The draft code had also proposed to bring down the corporate income tax rate to 25 per cent to 34 per cent at present The government had released a second draft of the code in June this year but steered clear from proposing any new tax rates or slabs and stated that it would be made known only in the proposed Act.
Sources, who did not wish to be identified, said the Bill will most likely be introduced in Parliament on August 30, a day before the Monsoon session ends.
We do expect DTC to be introduced in Parliament in this session, revenue secretary Sunil Mitra had said at a Confederation of Indian Industry (CII) event on Tuesday.