New Direct Tax Code (DTC) bring joy for the salary class

A good news for the tax payers is here, as the government has come up with a new tax code with the increased income tax exemption limit. The cabinet has approved this new Direct Taxes Code Bill and is likely to be introduced in Rajya Sabha, during the ongoing Monsoon session.

Some of the highlights of Direct Tax Code (DTC) are:

• Exemptions for income tax would be raised to Rs 2 lakh
• Tax for income between Rs. 2 lakh - Rs. 5 lakh: 10%
• Tax for income between Rs. 5 lakh - Rs. 10 lakh: 20%
• Tax for income over Rs. 10 lakh: 30%
• Limit of exemptions for income tax for senior citizens would be Rs. 2.5 lakh
  

According to sources, the DTC bill is likely to be tabled in Lok Sabha on Monday. Thereafter, it will be referred to the select committee.At present, income between Rs 1.65 lakh and Rs 5 lakh attracts 10 per cent tax, while the rate is 20 per cent for the Rs 5 - 8 lakh bracket and 30 per cent for above Rs 8 lakh.

New Direct Tax Code (DTC) Bill also propose to tax long-term savings like PF at the time of withdrawal.