The Direct Tax Code bill, aimed at simplification of the country's archaic direct tax laws, was tabled in the Lok Sabha today by finance minister Prabnab Mukherjee today.
The new laws that are supposed to come into effect from 1 April, 2012 and under the bill the income tax threshold limit for individuals would be raised to Rs2 lakh from the present Rs1.6 lakh. Senior citizens will get exemption up to Rs2.5 lakh, up from the Rs2.4 lakh at present.
For incomes between Rs2-Rs5 lakh, the tax has been proposed at 10 per cent, for Rs5-10 lakh at 20 per cent and for income above Rs10 lakh, the income tax rate has been proposed at 30 per cent.
Also the government has mooted a 15 per cent dividend distribution tax. It has proposed that net wealth above Rs1 crore would attract a tax rate of 1 per cent.
Companies will have to pay a 30-per cent tax rate. At present domestic companies are required to pay up a tax rate close to 33 per cent taking into account surcharge and cess.
The proposal for Minimum Alternate Tax (MAT) on companies is proposed to be charged at 20 per cent as against the current rate of 18 per cent. MAT has to be paid by companies that avail some kind of tax benefits or tax exemption under various schemes, mostly by export-oriented units that enjoy tax exemption.