POSTED BY August 27, 2010 COMMENTS (106)ON
Update Aug 30 ,2010 , 5:00 PM : This post should be now considered as post with old information as after DTC was tabled in Parliament , there were many changes in DTC.
Also DTC Bill has been delayed by 1 yrs and will come into effect from Apr 2012 , Link
Cabinet has finally approved the Direct Tax Code and now it would go to Parliament for approval and as per tax expert Subhash Lakhotia is would be easily passed by the Parliament. Finally the Tax system of our country is going to simplify after New tax code comes into effect from Apr 2011 next year. The bad part is that the tax slabs have been revised and now its much lesser than what was proposed earlier (Link)
New Tax Slab : 10% for 2-5 lacs , 20% for 5-10 lacs and 30% for above 10 lacs
Proposed Tax Slab earlier : 10% on 1.6-10 lacs , 20% for 10-25 lacs and 30% for above 25 lacs.
Some More Features
You should note that all these changes are going to happen from Apr 2011 (next year). For this current year, everything is same (you will get same old 80C deductions)
Why Public might get disappointed
The biggest blow is the change in the tax slab, especially investors who earn in range of 5-10 lacs per year , earlier Financial minister promised that the tax would be 10% upto 10 lacs , but now there is 20% tax for 5-10 lacs range , which means that effectively the tax paid would be 2 times of what it would have been earlier. Also even for high earning people who make in range of 10-25 lacs , earlier it would have been 20% , but now it would be 30% , which is good enough disappointment 🙂 .
Here is a nice video which would give you good insight on what to expect from Direct Tax Code .
Comment on how you feel about the tax slab ? Are you happy about it or disappointed ? I think it would be a big disappointment for a lot of people, at least personally I am disappointed by that 🙂 .