The Government today tabled the much-awaited Direct Taxes Code bill (DTC) in the Lok Sabha which proposed to raise the exemption limit on income tax from the current Rs 1.6 lakh to Rs. 2 lakh.

The bill, introduced by Finance Minister Pranab Mukherjee, seeks to widen income tax slabs to levy 10 per cent rate on income between Rs. 2 lakh to 5 lakh, 20 per cent on between Rs. 5-10 lakh and 30 per cent above Rs. 10 lakh.

The bill, introduced by Union finance minister Pranab Mukherjee, seeks to widen tax slabs to levy 10% rate on income between Rs2 lakh and 5 lakh, 20% on Rs5-10 lakh and 30% above Rs10 lakh.

For senior citizens, tax exemption is sought to be raised to Rs2.5 lakh from Rs2.40 lakh.

Currently, income from Rs1.6-5 lakh attracts 10% tax; from Rs5-8 lakh, 20% and beyond Rs8 lakh, 30%.

The proposed tax slabs are much lower than originally suggested in the draft DTC bill – 10% for Rs1.6 lakh to Rs10 lakh, 20% from Rs10-25 lakh and 30% for income above Rs30 lakh.

The Bill seeks to fix corporate tax at the current 30% but without surcharge and cess. With surcharge and cess, the current tax liability on companies comes to over 33%.

The legislation also proposes to increase MAT from 18% to 20% of book profit of a company. It seeks to levy dividend distribution tax at 15%.

When enacted, DTC will replace archaic Income Tax Act.

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Tags: direct tax bill, Pranab Mukherjee