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| DTC to be bulkier than existing Income Tax Act |
| Press Trust of India / New Delhi Aug 30, 2010, 20:57 IST |
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The proposed Direct Taxes Code (DTC), which will replace the archaic Income Tax Act, is bulkier than the existing law, as the new legislation also seeks to substitute the current Wealth Tax Act.
While the proposed DTC has 319 sections and 22 schedules, there are 298 sections and 14 schedules in the existing act. The Wealth Tax Act, 1957, itself has 47 sections and three schedules.
As per the Bill placed in the Lok Sabha by Finance Minister Pranab Mukhejee, the DTC, which will replace the Income Tax Act 1961, has 20 chapters divided into nine parts.
Various parts of the DTC deal with a plethora of subjects, including income tax, dividend distribution tax, tax on distributed income, branch profit tax, wealth tax, prevention of abuse of the code, tax management, general provisions and interpretation of the code.
Its sections deal with number of issues such as basis of charge of the tax, computation of total income, foreign tax credit, income from business and residuary sources, capital gains, tax incentives, special provisions relating to the computation of total income of non-profit organisations, deduction at source, advance tax and payment of wealth tax.
The proposed Bill also has sections to deal with recovery, prosecution and penalties.
The government today tabled the DTC Bill in the Lok Sabha, which proposes to raise the exemption limit from the current Rs 1.6 lakh to Rs 2 lakh from income tax.
The Bill widened income tax slabs to levy 10 per cent rate on income between Rs 2 lakh and Rs 5 lakh, 20 per cent on between Rs 5-10 lakh and 30 per cent above Rs 10 lakh.
While the proposed Bill is silent on special exemption for women, it proposes to raise tax exemption for senior citizens to Rs 2.5 lakh from Rs 2.4 lakh currently.
The Bill sought to fix corporate tax at the current 30 per cent but without surcharge and cess.
It also proposed to increase MAT from 18 per cent to 20 per cent of book profit of a company. It sought to levy dividend distribution tax at 15 per cent.
Regarding wealth tax, the proposed DTC sought to levy a rate of one per cent for wealth exceeding Rs 1 crore.
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