New Direct Tax Code will CUT Tax or Pocket ?

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New Direct Tax code (DTC) and Income Slab



  • What is the new Direct Tax Code about?

The Union Government is in the process of restructuring the Direct Tax Laws in the country by introducing a new direct tax code that will replace the Income Tax Act of 1961. The existing direct tax law, which deals with personal income tax, corporate tax and other levies such as the capital gains tax, has undergone numerous changes over the years.
The new direct tax code will try to bring more assesses into the tax net, make the system more equitable for different classes of taxpayers, make businesses more competitive by lowering the corporate tax rate and phase out the remaining tax exemptions that lead to litigation. It will also redefine key concepts such as income and scope of taxation.
  • What is difference between DTC and Income Tax-1961 slabs ?
Currently, there is a 4% cess on total tax and full tax rebate for incomes up to Rs 5 lakh a year. The new DTC has reportedly recommended scrapping of the surcharges but retained the tax rebate.
  • DTC income slabs Impact on different Taxpayes.
  1. If annual Taxable income Rs. 6 Lakh
  2. If annual Taxable income Rs. 9 Lakh
  3. If annual Taxable income Rs. 12 Lakh
  4. If annual Taxable income Rs. 24 Lakh
  5. If annual Taxable income Rs. 60 Lakh
  6. If annual Taxable income Rs. 1.2 Crore
  7. If annual Taxable income Rs. 2.5 Crore
  • Its a Win-Win situation for Taxpayer in DTC because there are sharp cut in Tax and DTC is like Pocket Friendly for Taxpayer as of now.

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