The much-awaited Direct Tax Code (DTC) Bill, which aims to replace the existing Income-Tax Act, 1961, has finally been presented in the Parliament and once approved by both Houses, it will be enacted as a law, effective from April 1 2012. While a lot had been anticipated from the DTC in terms of widening of tax slabs and reduction in tax rates, the proposal in its current form does not have a great deal for the aam aadmi.
For one, though the tax slabs for individual tax payers have been widened, the resultant savings in the hands of the individual tax payers is just a pittance.
TAX SLABS: The DTC proposes to increase the limit of income exempt from tax to `2 lakh from the current `1.6 lakh for individual and to `2 lakh from `1.9 lakh for working women. This will result into a minimum saving of `4,000 per annum for individuals and `1,000 per annum for women.
On the positive note, the new proposal aims to abolish the distinction between the individual and a women tax payer, bringing both of them at par at least as far as payment of taxes is concerned. But given the rising cost of living with each day, an additional disposable income of about `4,000 and `1,000, respectively, does not sound much appealing.